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in Re CVR Energy, Inc., CVR Partners, LP, CVR Refining, LP, Gary-Williams Energy Company, LLC
Citation: Not availableDocket: 01-15-00877-CV
Court: Court of Appeals of Texas; October 15, 2015; Texas; State Appellate Court
Original Court Document: View Document
The document pertains to an original proceeding in the First Court of Appeals in Houston, Texas, involving relators CVR Energy, Inc., CVR Partners, LP, CVR Refining, LP, and Gary-Williams Energy Company, LLC, as they seek a writ of mandamus from the 434th Judicial District Court of Fort Bend County, Texas, presided over by Judge James H. Shoemake (Cause No. 2013-DCV-209679). The relators are represented by attorneys Phillip D. Sharp and Lee M. Smithyman, who have pending applications for pro hac vice admission. The real parties in interest, Leeanna Mann and Kari Smith, are represented by several attorneys including Gary M. Riebschlager, Richard L. Tate, Sidney F. Robert, and David M. Medina. An oral argument has been requested. The document includes contact information for all parties and their counsel. The document outlines various sections pertaining to a legal case, including the identity of parties and counsel, jurisdiction, and a summary of the case. The key issues presented include the liberal granting of designations of responsible third parties, specifically focusing on Wynnewood's intended responsibility, the statutory encouragement for liability apportionment, and the refusal of the district court to allow Wynnewood's designation as a responsible third party, which the relators argue warrants mandamus relief. The arguments are structured as follows: 1. **Designation of Responsible Third Parties**: It asserts that Wynnewood’s role should always be considered by the jury and that the statutory framework promotes sharing liability among all responsible parties. 2. **Mandamus Relief**: The relators argue that the denial of Wynnewood’s designation meets the mandamus standard for relief, emphasizing the intertwined nature of Wynnewood's involvement with the plaintiffs' allegations. They assert that their motion to designate Wynnewood was timely, having been filed over 60 days before trial, and that the statute of limitations does not prevent this designation. 3. **Sufficiency of Pleading**: The relators contend they provided adequate facts to justify Wynnewood’s designation as a responsible third party. The document concludes with a prayer for relief, followed by certifications regarding compliance and service. A table of authorities lists relevant cases, statutes, and other legal references that support the arguments presented. The petition for a writ of mandamus challenges Judge Shoemake’s denial of a motion to designate Wynnewood Refining Company, LLC as a responsible third party under Texas law. The plaintiffs, surviving family members of Russell Mann and Billy Smith, filed wrongful death claims following a refinery explosion in Wynnewood, Oklahoma, on September 30, 2013. Wynnewood, an immune employer under Oklahoma workers’ compensation laws, participated in the litigation for nineteen months before the plaintiffs non-suited their claims against it just fifty-five days before the original trial date. The relators, affiliated parent companies of Wynnewood, sought to designate Wynnewood as a responsible third party to compare fault at trial. Their motion, filed twenty-six days after the non-suit, was denied on October 12, 2015. The scheduled trial is set to begin on October 20, 2015, and is expected to last over two weeks with numerous out-of-state witnesses. The jurisdiction for the mandamus petition is established under Texas law. The main issue presented is whether the district court abused its discretion by denying the motion to designate Wynnewood, given its lengthy involvement in discovery, the lack of notice regarding the plaintiffs' non-suit, and the interconnection of Wynnewood's potential fault with the allegations against the relators. Key facts include the details of the explosion on September 28, 2012, and the relationships among the involved companies, including that Wynnewood is a subsidiary of CVR Energy, Inc., which operates refineries in Oklahoma and Kansas. CVR Energy is publicly traded and based in Texas. On September 28, 2012, the accident involved CVR Refining, LP, an indirect, wholly-owned subsidiary of CVR Energy, Inc., which had no interest in Gary-Williams Energy Company, LLC (an indirect, wholly-owned subsidiary of CVR Energy) or Wynnewood Refining Company, LLC (a wholly-owned subsidiary of Gary-Williams). Wynnewood, a Delaware limited liability company based in Wynnewood, Oklahoma, became an indirect subsidiary of CVR Refining, LP following a corporate reorganization in 2013, with CVR Energy owning a two-thirds interest in CVR Refining. The plaintiffs allege negligence, gross negligence, or intentional misconduct by Wynnewood, citing claims from their original and supplemental petitions filed in 2015. Key allegations include that the Wickes boiler used at Wynnewood was outdated and lacked a Boiler Management System, contributing to dangerous working conditions. Plaintiffs assert that Wynnewood had prior knowledge of incidents involving the boiler but failed to implement necessary repairs or upgrades. They contend that Wynnewood’s negligence directly caused injuries to two individuals, Mann and Smith, as did the corporate relators, who allegedly neglected their responsibilities to monitor and improve safety conditions at the refinery. Both families of the injured parties are receiving workers' compensation benefits valued over $500,000 each, with a total of approximately $1,181,654 to be paid to the heirs of Mann and Smith under the Oklahoma Worker's Compensation Statute, which grants immunity to Wynnewood as an employer. Furthermore, plaintiffs have accused Wynnewood’s corporate affiliates of 'alter ego' and 'parental liability' for Wynnewood's actions. Discovery in the case has been extensive, with the production of a fifteen-page Incident Report highlighting operational failures at Wynnewood. Plaintiffs have conducted numerous depositions, primarily of Wynnewood employees, and submitted over 150 requests for production, resulting in significant documentation being disclosed by the defendants. The two-year statute of limitations for wrongful death claims related to Russell Mann expired on September 28, 2014. In contrast, the claims for Billy Smith, as asserted by his minor son Rogan Smith, remain valid until Rogan reaches the age of majority. On April 22, 2015, the Plaintiffs non-suited Wynnewood Refining Company, LLC without prior notice. Subsequently, on May 18, 2015, the Defendants served disclosures to designate Wynnewood as a responsible third party and filed a motion to ensure Wynnewood's negligence would be assessed at trial. The Plaintiffs objected to this motion on May 27, 2015, and the Defendants responded on June 10, 2015. On September 14, 2015, shortly before the scheduled trial, the Plaintiffs filed their Fourth Amended Original Petition, continuing to allege Wynnewood's negligence in the deaths of Mann and Smith. Throughout the litigation, Plaintiffs consistently identified Wynnewood as a responsible party, despite their prior non-suit. On September 22, 2015, the court heard arguments regarding the motion to designate Wynnewood, which was ultimately denied on October 12, 2015. The summary of the argument asserts that the district court abused its discretion in denying the motion to designate Wynnewood as a third party. It contends that a post-trial appeal is insufficient as the denial prejudices the trial outcome. Following a Supplemental Brief where all parties acknowledged Wynnewood's status as a responsible third party, the Plaintiffs subsequently filed a Fifth Amended Petition removing prior allegations against Wynnewood. Evidence indicated that the incident occurred on Wynnewood property, supervised by its personnel, and involved equipment owned by Wynnewood. The motion for designation complied with Texas Civil Practice and Remedies Code provisions and was timely, filed after the Plaintiffs non-suited Wynnewood. The Plaintiffs’ non-suit occurred well after the limitations period for Russell Mann's claims had elapsed, but claims for Billy Smith could still be pursued through Rogan Smith. The necessity for designation was negated while Wynnewood remained a party defendant. The designation motion's liability allegations were deemed sufficient, originating from the Plaintiffs’ Petitions, in accordance with TEX. CIV. PRAC. REM. CODE. 33.004(g). The district court denied Relators the chance to replead facts regarding Wynnewood's responsibility before denying the motion for leave, contrary to requirements set forth in Texas law. Under the Texas proportionate responsibility law, the jury is expected to apportion responsibility among all parties contributing to the harm, including the plaintiff. Wynnewood, as a named defendant, met the criteria under Section 33.003(a) for comparison of responsibility. The law mandates that the trier of fact assesses the percentage of responsibility among all claimants, defendants, settling persons, and designated responsible third parties. From September 30, 2013, to April 22, 2015, Wynnewood was recognized as a defendant and would be included in the verdict form. However, it was non-suited on April 22, 2015, leading to its exclusion for twenty-six days from damage recovery submissions. On May 18, 2015, Relators designated Wynnewood as a responsible third party, asserting its contribution to the harm in question. This designation was in line with the established understanding that Wynnewood's potential negligence would be assessed alongside the Relators' responsibilities throughout the litigation period. The statutory framework promotes the apportionment of liability among all responsible parties, with courts generally favoring the liberal designation of responsible third parties, as established in relevant case law. This approach allows juries to evaluate the actions of all potentially liable entities. The proportionate responsibility statute in Texas allows for the apportionment of liability among all responsible parties by a jury. Amendments made in 2003 liberalized the process, enabling defendants to designate a "responsible third party" (RTP) without having to join them in the lawsuit, thus broadening the definition of an RTP to include anyone allegedly contributing to the harm. If a defendant files a motion to designate an RTP and there are no objections within fifteen days, the court must grant the motion. Even if objections are raised, the court still must grant the designation unless insufficient facts are provided regarding the RTP's responsibility. If insufficient facts are initially pled, the court must allow the defendant to replead. Prior to the 2003 amendments, certain parties, such as an employer of the claimant, were exempt from being designated as RTPs. The amendments removed these restrictions, allowing even immune employers under workers' compensation to be designated as RTPs, which helps reduce a defendant's liability thresholds. While the statute allows for the designation of responsible parties regardless of their defenses to liability, it specifies that these designations cannot be used in other proceedings to impose liability on the RTP. The text outlines the legal implications of designating a responsible third party in litigation, highlighting the importance of preventing the 'empty chair defense'—a tactic where a defendant blames absent parties for liability. The case In re Arthur Andersen LLP is referenced, emphasizing that even under earlier statutes, the rationale for allowing such designations is to enable a jury to assess liability among all potentially responsible parties within a single proceeding, thereby avoiding fragmented litigation and unbalanced outcomes. The document asserts that the refusal to designate Wynnewood as a responsible third party constitutes grounds for mandamus relief due to the trial court's incorrect application of Chapter 33. For mandamus relief, a relator must show that the trial court clearly abused its discretion and that no adequate remedy exists via appeal. The standard for abuse of discretion includes a trial court's failure to properly analyze or apply the law. The text underscores that while factual determinations are reviewed with deference, legal errors are scrutinized more closely, as trial courts lack discretion in interpreting the law. The potential benefits of mandamus are evaluated against its detriments, particularly in preserving substantive and procedural rights and guiding legal clarity for future cases. Courts evaluate mandamus relief by considering its potential to save litigants and the public from the waste of time and resources associated with reversing improper judicial decisions. Mandamus relief is typically granted when a district court abuses its discretion by denying a motion to designate a responsible third party, as established in various precedents. Notable cases affirming this principle include In re Arthur Andersen LLP, In re Brokers Logistics, Ltd., and In re Lewis Casing Crews, Inc. For instance, in Lewis Casing, the court granted mandamus relief when the trial court denied the designation of an employer as a responsible party, noting that an appeal would not adequately address the potential skewing of the proceedings and its impact on the defense. The document also references similar cases where mandamus was granted to maintain the integrity of the trial process, emphasizing the necessity of including all responsible parties in litigation to ensure fair apportionment of liability. The current trial, projected to last over two weeks with numerous witnesses, underscores the importance of early resolution of such procedural disputes to avoid complicating the trial's outcome. Plaintiffs allege that defendants failed to inspect and maintain a crane properly, while defendants assert that Cargotec was responsible for the crane's inspection, maintenance, and repair. The Energy Resources Court determined that the potential negligence of Cargotec is pertinent to the plaintiffs' claims against the relators, as the issues and evidence are closely linked. The court ruled that severing the relators' contribution claims against Cargotec was an abuse of discretion. Relators argue that an appeal would not remedy the denial of their motion to designate Wynnewood as a responsible third party, emphasizing that mandamus relief would prevent unnecessary litigation costs associated with reversing improperly conducted proceedings. The connection between Wynnewood and the plaintiffs' allegations against the relators is significant, as the accident occurred on Wynnewood property, under its supervision, and involved a boiler maintained by Wynnewood. Relators assert that all evidence related to the explosion is tied to Wynnewood and that any alleged failures by the relators in controlling safety should be assessed in light of Wynnewood's operations. Plaintiffs claim the relators neglected safety responsibilities, which necessitates considering Wynnewood's role in any discussions of fault. The Formal Incident Investigation Report identified several root causes linked to Wynnewood's operations that contributed to the accident. Relators filed a motion to designate Wynnewood for comparison of fault shortly after plaintiffs non-suited their claims against Wynnewood, arguing that Wynnewood's potential responsibility is inextricable from the plaintiffs' allegations against the relators. Mandamus is sought to address the improper severance that hinders a fair evaluation of the case. Requesting the jury to focus solely on the Relators’ fault, excluding Wynnewood’s involvement, risks distorting the trial's outcome and undermining the Relators’ defense. Relators filed their motion for leave to designate Wynnewood as a responsible third party in compliance with Texas Civil Practice and Remedies Code §33.004(a), more than 60 days before the trial, which was originally set for June 16, 2015, but later postponed to October 20, 2015. The motion was timely, as it was filed on May 18, 2015, and any claims to the contrary are deemed frivolous. The 60-day rule is intended to ensure that plaintiffs can engage in discovery and join the responsible third party before trial, preventing last-minute designations that could disadvantage plaintiffs. For 19 months, Wynnewood’s fault was already part of the case, and it was unnecessary to designate it as a responsible party until after the plaintiffs dismissed their claims against Wynnewood shortly before trial. The Texas Civil Practice and Remedies Code does not allow plaintiffs to prevent designations by dismissing a responsible party within this window, as such actions would defeat the purpose of Chapter 33, which aims to fairly allocate fault. Relators filed their designation motion within 26 days of the plaintiffs' non-suit notice, and discovery regarding Wynnewood had been conducted during its time as a defendant. Although Wynnewood claimed immunity under Oklahoma’s workers’ compensation laws, a legal defense does not preclude designation as a responsible third party. Therefore, the designation was timely and would not have surprised the plaintiffs, ensuring that all potential fault is addressed in the litigation. Relators successfully used Plaintiffs’ allegations of negligence to justify the designation of Wynnewood as a responsible third party, countering any claims of unfair prejudice by Plaintiffs. After Relators filed their motion, Plaintiffs subsequently added claims for a minor child, Rogan Smith, which did not affect the timeliness of Relators' designation. The statute of limitations does not bar this designation, as Rogan Smith's claims remain valid until he reaches the age of majority. Furthermore, the claims of another minor, Christina, are tolling the statute of limitations due to her legal disability at the time of her father's death. Thus, section 33.004(d) does not restrict Relators' right to designate Wynnewood. Plaintiffs attempted to non-suit Rogan Smith's claims, but this action is deemed irrelevant as wrongful death claims must be made collectively by all statutory beneficiaries. Relators have raised a plea in abatement regarding these issues, which is currently under consideration. Timely designation of Wynnewood allowed Relators to avoid the limitations imposed by section 33.004(d), which permits such designations post-limitations if timely disclosures are made in accordance with procedural rules. Courts interpret the "timely disclosure" requirement to achieve fair results. The court interprets the 'timely disclosure' requirement of Texas Civil Practice and Remedies Code § 33.004(d) with the assumption that the Texas Legislature aimed for a fair outcome. Parties are obligated to disclose necessary information during discovery and must supplement their responses if they become incomplete or inaccurate, as mandated by Texas Rules of Civil Procedure (TRCP) 193.5. The purpose of § 33.004(d) is to permit a plaintiff to join a responsible third party in a timely manner to recover damages related to that party's fault. A defendant must promptly disclose any potentially liable third parties to allow the plaintiff the opportunity to join them before the statute of limitations expires. In this case, the plaintiffs did not have recourse against Wynnewood due to its immunity during various periods of litigation, including when it was an active party and during the time the motion to designate was pending. The plaintiffs sued Wynnewood on September 30, 2013, and dismissed their claims against it on April 22, 2015, after the statute of limitations had run. Until that dismissal, Wynnewood was considered a defendant, and its liability could be assessed by a jury. On May 18, 2015, after the non-suit, the defendants designated Wynnewood as a potential responsible third party, which the plaintiffs cannot contest regarding its timing since they chose to non-suit their claims after the limitations period had expired. This decision eliminated the opportunity for the defendants to designate Wynnewood before the statute of limitations expired. Despite the non-suit, the plaintiffs continued to assert that Wynnewood's actions contributed to the deaths involved in the lawsuit. On September 14, 2015, the Real Parties in Interest filed their Fourth Amended Original Petition, alleging that Wynnewood Refining Company, LLC intentionally caused the deaths of Billy Smith and Russell Mann. This allegation was made shortly before the second scheduled trial date, and the Plaintiffs cannot claim that Relators' motion for leave to designate Wynnewood as a responsible third party was untimely, as it was filed four months prior to their allegations. Relators complied with Texas Civil Practice and Remedies Code § 33.004, with their motion being timely and justly reflecting the circumstances. Under § 33.004(g), the burden is on the Plaintiffs to prove that Relators did not plead sufficient facts regarding Wynnewood's responsibility. If an objection to the motion for leave is timely filed, the court must grant leave unless the objecting party demonstrates that the defendant failed to meet the pleading requirements of the Texas Rules of Civil Procedure. Texas law requires a “fair notice” standard, ensuring that the opposing party can identify the nature of the claims and prepare a defense. Relators based their motion on facts extracted from the Plaintiffs’ Third Amended Petition, a standard practice. Pertinent to the case, the Plaintiffs alleged that Mann and Smith were employees of Wynnewood and were involved in restarting a boiler on September 28, 2012. Consequently, the Plaintiffs must establish that their own allegations against Wynnewood do not provide adequate notice of its potential liability in the incident. Plaintiffs allege that Smith and Mann were responsible for monitoring the boiler and controlling its gas valve at the Wynnewood refinery, respectively. While performing their duties, an explosion occurred, resulting in their deaths. The plaintiffs claim that Wynnewood had dangerous practices and was aware of previous boiler detonations but failed to properly maintain and update the equipment, leading to negligence and gross negligence that proximately caused Smith and Mann's injuries. The document states that the Relators provided sufficient notice of the litigation's nature by quoting the plaintiffs’ own language and that there is no heightened requirement for designating a responsible third party. The Relators sought to designate Wynnewood as a third party based on the allegations in the plaintiffs’ petitions, asserting that the trial court abused its discretion by denying their motion without allowing an opportunity to replead. Texas appellate courts support mandamus relief in cases where a district court improperly denies such motions, as it can skew proceedings and compromise defense strategies. The Relators argue their motion was timely and compliant with statutory requirements, prompting a request for a Writ of Mandamus to vacate the trial court's order and allow Wynnewood's designation as a responsible third party for fault comparison at trial. Application for admission pro hac vice is pending for the attorneys representing the relators. The undersigned, Philip D. Sharp, certifies that the petition has been reviewed and all factual statements are substantiated by the record. The Petition for Writ of Mandamus contains 8,424 words and adheres to Texas Rules of Appellate Procedure, rule 9.4. A certificate of service confirms that copies of the petition have been sent to all known counsel of record via email and U.S. Mail, including specific details of recipients and their contact information. The document is filed with the Honorable James H. Shoemake of the 434th Judicial District Court, Fort Bend County, with the filing dated October 14, 2015. An appendix is included, listing five specific tabs related to the petition, such as an order from October 12, 2015, a transcript of a hearing, and relevant Texas civil practice statutes.