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In a case that’s drawn interest throughout Texas, an appeals court in San Antonio ruled on June 27 that a judge erred in excluding evidence of compensatory damages in a wrongful-death suit brought by the widow of a worker who died of injuries suffered in a refinery explosion. The appeals court, in a 2-1 decision, held that the exclusion of the evidence resulted in an “improper judgment” in Donna Hall v. Diamond Shamrock Refining Co.. Following a 1998 trial, a San Antonio jury found Diamond Shamrock grossly negligent for the death of its employee, Charles Hall, and awarded his widow $42.5 million in punitive damages. But 225th District Judge John Specia Jr. reduced the award to $200,000 because there was no evidence of actual or compensatory damages allowed at trial from which the punitive damages could be calculated. Acting on a motion by Diamond Shamrock, Specia prohibited the widow from presenting any evidence of a claim for damages other than punitive damages, Justice Alma Lopez, author of the court’s opinion, wrote. According to the opinion, Donna Hall sought to offer proof of more than $2.6 million in economic and non-economic damages. The appeals court found that Specia abused his discretion and granted Hall a new trial. Lawyers around the state have been monitoring the case. “I think anybody who’s ever practiced employment safety law was watching the case,” says Mikal Watts, a partner in Corpus Christi, Texas’ Watts & Heard. If the appeals court had not ruled the way it did, damages in every workers’ compensation wrongful-death case in the state would have been capped at $200,000, Watts says. As a result of the ruling, a survivor can get two times the lost wages plus up to $750,000 in non-economic damages, says J. Christopher Dean, who along with his partner, Robert E. “Bob” Garner, represents Hall. Dean, a partner in the Amarillo, Texas office of Garner, Stein & Dean, says he’s disappointed in the ruling but that it brings some good news. “It is good news that the court of appeals flushed down the toilet Diamond Shamrock’s notion that the $200,000 cap applies across the board in workers’ compensation wrongful-death cases,” Dean says. But Dean questions whether it’s good news that plaintiffs have to prove actual or compensatory damages that they can’t collect to receive more than $200,000 from an employer found to be grossly negligent for a death. The Texas Constitution allows survivors of a worker killed on the job to sue the employer for punitive damages. But the Workers’ Compensation Act prohibits the recovery of other damages from a self-insured employer covered under the act. Jurors’ efforts to determine the damages that an employer should pay in a workers’ comp wrongful-death case will be a “useless endeavor,” Dean says, because a jury will have no say in the matter. Representatives of Diamond Shamrock decline to comment about the ruling. “I’m unfortunately unable to comment on pending litigation at this time,” says Daryl G. Dursum, a partner in Adams and Reese in Houston and the lead attorney for Diamond Shamrock in the case. “It is our practice not to comment on any pending litigation,” adds Tara Ford, a spokeswoman for the company. NO CONTROL? In its answer to Hall’s suit, Diamond Shamrock blamed the accident on a third party or parties over which the company had no control. Specifically, Diamond Shamrock cited the alleged failure of valves, which allowed liquids to enter the compressor, and blamed it on companies that manufactured, supplied, repaired or sold the valves. The Bexar County suit is one of two stemming from the April 1, 1996, explosion and fire at the McKee Plant, a Diamond Shamrock refinery located near Sunray in the Panhandle. Charles Hall suffered third-degree burns over 50 percent of his body in the explosion and died eight days later in a Lubbock hospital, the appeals court said in the opinion. Two other workers, Ellis Thornburg and Kevin Smith, were badly burned when liquid hydrocarbon and gas mixed in a compressor and were ignited from an unidentified source, the opinion said. “During later investigations of the explosion, Diamond Shamrock found that the check valve failed and that the No. 2 RLE (Refinery Light Ends) compressor’s first stage discharge valve leaked,” Lopez wrote. Hall alleged in her suit that Diamond Shamrock defectively designed the system, resulting in liquids entering the compressor. She also alleged that valves that could have drained the liquid from the system were covered with dirt and that the company’s management was aware of the risk to employees but didn’t take action to protect or train them. Lopez, who was joined in the opinion by Chief Justice Phil Hardberger, held that the evidence is legally and factually sufficient to support the jury’s finding that Diamond Shamrock was grossly negligent. But Justice Paul Green wrote in a dissenting opinion that there is no evidence that anyone within the company had “actual, subjective awareness” that the system as designed would cause an explosion. In her appeal, Hall challenged the constitutionality of applying the caps set in �41.008 of the Texas Civil Practice and Remedies Code to a wrongful-death suit brought against an employer alleged to have been grossly negligent for the death of an employee. She argued that the caps, which the Legislature in 1995 applied to workers’ compensation wrongful-death suits, unreasonably restrict her cause of action for punitive damages that is allowed under the Texas Constitution. The Legislature can’t change the constitution unless the voters give their approval, Garner says. In its opinion, the appeals court said that punitive damages are levied for the public purpose of punishment and deterrence, not to restore a plaintiff’s property. “While Hall may be motivated to pursue this public purpose in the hope of securing punitive damages, such proceeds are a windfall and not a matter of right,” the opinion said. That portion of the court’s ruling is “troubling,” Watts says. “The Legislature doesn’t have the right to whittle away what the constitution says.” A bill that would have restored the exemption from the cap for workers’ comp wrongful-death cases passed the House in the session earlier this year but died in the Senate Business and Commerce Committee. Richard Evans, vice president for governmental affairs of the Texas Association of Business and Chambers of Commerce, says the ruling takes away the need for such legislation. Evans says TABCC recognizes that the trial court acted unfairly in Hall but that taking away the caps on punitive damages would be an unfair solution. “Let the evidence be presented to the jury,” he says. Hall and Diamond Shamrock have the right to seek a rehearing by the appeals court and also can appeal to the Texas Supreme Court. The company’s representatives aren’t talking, and Dean says Hall’s lawyers are still considering the options. “Right now we’re spit-balling,” Dean says. OTHERS INVOLVED Meanwhile, a hearing on proposed settlements in the other suit spawned by the explosion at the refinery was scheduled before 69th District Judge Ron Enns in Dumas, Texas on July 6, after press time. Thornburg and Smith, the two surviving injured workers, joined Hall and their families in suing other companies and individuals alleged to have some liability for the explosion. Several of the third-party defendants have been dismissed from Smith v. Unocal Corp., but the two who remain in the suit have received a unique offer. Hall, who now lives in Paris, Texas, agreed, on a contingency basis, to reimburse JS Machine and Unocal Corp. for the amounts they have agreed to pay the injured workers and their families. “God has blessed me,” Hall says. “This is something that I feel like God wants me to do.” David Anderson, a professor at the University of Texas School of Law, says it’s not unusual for a plaintiff to offer compensation to one or more defendants if they will offer evidence against another defendant. But that’s not the case in this suit. “The thing that’s unusual is she [Hall] seems to be so altruistic. That aspect of it is quite unusual,” Anderson says. The reimbursement that Hall has promised hinges on the outcome of her wrongful-death suit. Hugh Lyle, a partner in Lubbock, Texas’ Craig, Terrill & Hale, says his client, JS Machine, has agreed to settle with the plaintiffs for $400,000 but denied that the valves it manufactured caused the accident. Bradley Jackson, a partner in Houston’s Royston, Rayzor, Vickery & Williams, says his client, Unocal, denies any responsibility for the explosion but agreed to pay $75,000 to Susan Smith and Lavonna Thornburg, wives of the burn victims, to end the suit. “We’re simply trying to turn off the meter on this thing,” Jackson says. Diamond Shamrock filed a motion to intervene in the suit to recoup the benefits it’s paid to Hall, Thornberg and Smith. The company had paid the trio about $683,000 as of April 20, according to the motion seeking approval of the settlement. Chris Parker, a partner in Amarillo’s Peterson Farris Doores & Jones, represents Diamond Shamrock in the Moore County case but declines comment. In a May 1 letter to Garner and other lawyers involved in the settlement, Parker noted the company’s objections to the allocations that Garner proposed for the workers’ compensation beneficiaries and for attorneys’ fees and expenses. “Diamond Shamrock has a statutory right to reimbursement from the first monies paid to an injured employee and can recover that amount from either the employee or the third-party tort-feasor,” the letter said. Parker said in a May 7 letter to Garner that Diamond Shamrock would accept $175,000 to settle its claim. The letter said the company was offered only about $45,000 in the settlement proposed by Hall.

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