Limited Liability for Space Flight Activities in Texas

Private space flight is trending in the news again.

A Texas law effective in 2013 provides that a space flight entity is not liable for damages resulting from nuisance arising from testing, launching, reentering, or landing or subject to any claim for nuisance arising from testing, launching, reentering, or landing.

The law also mandates that a “space flight participant” (an individual, who is not crew, carried aboard a spacecraft, launch vehicle, or reentry vehicle) sign an agreement and warning statement before participating in any space flight activity.

This law does not limit liability for a space flight participant injury: (1) proximately caused by the space flight entity’s gross negligence evidencing willful or wanton disregard for the safety of the space flight participant; or (2) intentionally caused by the space flight entity.

Additionally, the law does not (1) limit liability for breach of a contract for use of realty by a space flight entity; or (2) preclude an action by a federal or state governmental entity to enforce a valid statute or regulation.

In our In the News series, we use an article or topic that has been featured recently in the news as a potential learning opportunity.

 

Should Landlords be Required to Install Carbon Monoxide Alarms?

Texas state law already requires, with few exceptions, that landlords install smoke alarms in each separate bedroom in a home, mobile home, duplex unit, apartment unit, condominium unit, or any dwelling unit in a multi-unit residential structure.

Carbon monoxide is colorless, tasteless, and odorless. It seems more and more often we hear of fatalities due to people unknowingly inhaling the gas, many times while sleeping.

Proposed Texas House Bill 4358 would impose upon residential landlords in some circumstances the duty to install, inspect, and repair a carbon monoxide alarm.

Note that tenants may already be allowed to install a carbon monoxide alarm themselves depending on the language of their leases, and some city ordinances may even now require the installation of the alarms.

In our In the News series, we use an article or topic that has been featured recently in the news as a potential learning opportunity.

Daredevils, Purple Paint, News Producers, and Jail

Four men were arrested last week for BASE jumping off of One World Trade Center. Here’s video footage of the jump. (The action starts at 2:48. Consider this your foul language warning.) A 16-year-old boy decided to climb to the top of the building, too — apparently because he could and had nothing better to do.

More alerted to the unwanted appeal of the building to daredevils (and those with too much time on their hands), police arrested two CNN producers last week who thought it a good idea to try to enter the property, presumably in an effort to expose its security flaws. According to this article in the New York Times, the producers were confronted by a police officer who told them to stop, but they continued anyway and tried to gain entry further down the street by scaling a fence. There were also “No Trespass” signs posted.

A person commits criminal trespass in Texas if he or she enters or remains on or in property of another without effective consent and the person had notice that the entry was forbidden or received notice to depart but failed to do so. It follows, therefore, that a person doesn’t commit criminal trespass if he isn’t notified first that he isn’t supposed to be there.

There are different ways to provide advance notice that entry is forbidden in Texas. A fence obviously designed to exclude intruders is deemed to be sufficient advance notice. Posting signs reasonably likely to come to the attention of intruders, indicating that entry is forbidden, is sufficient advance notice. And placing vertical lines of purple paint at least eight inches tall and once inch wide at certain height and spatial intervals on trees and posts on the property is deemed to be sufficient advance notice.

I’m a huge extreme sports fan. I always have been. I’m not sure that the threat of arrest is enough to stop someone who wants to jump from 1,700 feet. In fact, the threat of arrest may actually buttress the thrill of the entire activity. Still, I don’t recommend breaking the law, getting arrested, or doing something objectively unreasonable. What right-minded person would?

In our In the News series, we use an article or topic that has been featured recently in the news as a potential learning opportunity.

In the News: Despite Changes, the Sriracha Hot Sauce Legal Battle Still Burns

In our In the News series, we use an article or topic that has been featured recently in the news as a potential learning opportunity.

Last year the Los Angeles Times reported that the city of Irwindale, California had sued Huy Fong Foods (“HFF”), the manufacturer of Sriracha hot sauce, after residents complained of physical malaise. According to HFF’s website, “Sriracha is made from sun ripen chilies which are ground into a smooth paste along with garlic and packaged in a convenient squeeze bottle.” The lawsuit followed alleged complaints by several city residents that HFF’s factory was emitting offensive and noxious fumes leading to burning eyes, irritated throats, coughing, and headaches. Some residents apparently complained the fumes even prevented them from going outside at times.

In its lawsuit, Irwindale asserts that the emission of these odors constitutes a public nuisance. Although California law will apply to determine the outcome of this lawsuit, Texas also recognizes legal claims for nuisances. A nuisance is a condition that substantially interferes with the use and enjoyment of land by causing unreasonable discomfort or annoyance to persons of ordinary sensibilities. Texas law distinguishes public and private nuisances. A public nuisance is a condition that amounts to an unreasonable interference with a right common to the general public. A private nuisance is a non-trespassory invasion of another’s interest in the private use and enjoyment of land.

A variety of different activities (or lack of activities) may constitute nuisances. Some arguably obvious examples include incessant loud noise during late hours, the discharge of inordinate amounts of dust or dirt, bright lights, and possessing or making controlled substances. Less obvious examples in Texas include, for example in unincorporated areas of a county, the following: keeping refuse on premises in a neighborhood unless it’s entirely contained within an enclosed receptacle, keeping rubbish on premises in a neighborhood or within 300 feet of a public street for ten or more days unless it’s completely enclosed within a building or isn’t visible from a public street, allowing weeds to grow on premises in a neighborhood if the weeds are located within 300 feet of another residence or commercial establishment, and maintaining a flea market that constitutes a fire hazard. And there are many, many other actions or inactions that may be alleged to constitute nuisances.

At the outset of its case, Irwindale asked the judge to shut down all of HFF’s factory operations during the pendency of the lawsuit. The judge, however, believed that request was over broad. Instead, he ordered that HFF was prevented from “emitting anything that causes odors or are odors in themselves,” and that HFF was “to immediately make changes in its site operations reducing odors and the potential for odors consistent with” certain air quality mitigation measures. This order did not conclusively determine the outcome of the lawsuit. It was only intended to preserve the status quo of the subject matter of the litigation, taking into account the health and safety allegations, until there is a trial on the merits.

On Friday, the Pasadena Star-News reported that HFF recently made changes to its odor filtering system and has invited the city’s Community Development Director to the factory to observe the changes. Nevertheless, the city of Irwindale has stated that it plans to add a breach of contract claim to their lawsuit. The case is scheduled for trial this autumn. Ironically, if this lawsuit causes a decrease in HFF’s production, it may actually help HFF’s business under traditional market principles of supply and demand.

In the News: The “Liening” Museum Tower of Dallas

Extra! Extra!

In our In the News series, we’ll use an article or topic that has been featured recently in the news as a potential learning opportunity.

For some time now the Dallas Museum Tower and Nasher Sculpture Center have been reported to have a difference of opinion over an alleged problem with light that is reflected from the Museum Tower’s glass exterior into the sculpture center. D Magazine ran an article on it in May 2012. Bloomberg reported on it. The Huffington Post reported on it. The Dallas Morning News even wondered aloud who might be the first to sue. For this reason, a headline in the local news last week caught the attention of many, although not all, Dallasites: “$800,000 in unresolved claims filed against Museum Tower.”

It seems that the Museum Tower hired Austin Building Company (“Austin”) to serve as a General Contractor. Custom Components Company (“CCC”), in turn, was apparently tapped to furnish “exterior glass and metal railings” on the project to or through Austin. According to the news article, more than one mechanic’s lien has been filed against the Museum Tower, and CCC has filed suit to foreclose their lien in the amount of roughly $237,000. A spokesperson for Austin is quoted as saying, “A bond was filed to protect the owner of the project in the event of suit to foreclose the lien. Austin vigorously contests this claim, and is working to resolve this issue.”

CCC’s Original Petition, filed January 7, 2014, confirms that CCC filed a mechanic’s lien against the Museum Tower property in April 2013. CCC is now seeking an order from the 191st District Court of Texas foreclosing the property to satisfy its lien. CCC is also suing Austin for breach of contract and Austin and the Museum Tower for unjust enrichment. These claims are independent and separate from CCC’s mechanic’s lien claim. CCC did not name the surety as a party to the lawsuit.

A lien is a “legal right or interest that a creditor has in another’s property, lasting usually until a debt or duty that it secures it is satisfied. Typically, the creditor does not take possession of the property on which the lien has been obtained.” Black’s Law Dictionary 933 (7th ed. 1999). A mechanic’s lien is a lien that “secures payment for labor or material supplied in improving, repairing, or maintaining real…property, such as a building…or the like.” Id. at 935. (Did you know that the word realty is short for real property?) In a future Law 101 post we’ll discuss the meaning and fundamentals of mechanic’s liens in greater detail. If the suspense is killing you, here’s an article on Five Frequently Asked Questions About Texas Mechanic’s Liens. In short, mechanic’s liens turn specific property into collateral that may be judicially foreclosed to satisfy a debt under certain circumstances.

So CCC has filed a mechanic’s lien and is asking the judge to foreclose the collateral to pay for labor/materials for which CCC claims it is still owed. We don’t know what the Nasher thinks about this. But Austin seems to think that a bond that was filed will protect the owner of the Museum Tower from the lien claim. Depending on what type of bond has been filed and when and how it was filed, Austin may be correct.

Chapter 53 of the Texas Property Code contains most of the information concerning Texas statutory mechanic’s liens. Subchapters H and I of Chapter 53 discuss bonds to indemnify against liens and bonds to pay liens, respectively. Think of bonds simply as insurance. Subchapter H allows a person — usually the General Contractor — to obtain and file a bond after a mechanic’s lien has been filed against property, the effect of which is to discharge the mechanic’s lien claim against the property. Subchapter I provides that a General Contractor may furnish a payment bond at any time, the effect of which is that a “claimant may not file suit against the owner or the owner’s property” if the bond meets other statutory requirements. See Tex. Prop. Code sec. 53.201(b). These requirements include, among other things, that the bond be in a certain amount and that it be recorded in the county clerk’s office. Project owners often ask General Contractors to furnish payment bonds before projects commence. If a payment bond has been obtained and recorded at the time an unpaid claimant files its mechanic’s lien, then the law creates a limited window of time in which the claimant may sue on the bond: no sooner than 60 days after the claimant perfects the lien and no later than one year after perfection of the lien claim.

Will Austin utilize Texas’s relatively new motion to dismiss procedure to challenge CCC’s mechanic’s lien foreclosure claim? Will CCC amend their petition to add the surety to the fray? Will the surety intervene into the action on its own volition? Any of these options will have to be pursued relatively soon. And either way, Austin and the Museum Tower will still have to contend with CCC’s breach of contract and unjust enrichment claims. At the end of the day, I’d be willing to wager that the Museum Tower, Austin and CCC all share at least one sentiment: they all want CCC to be paid a fair price for the labor/materials CCC furnished in light of all of the underlying circumstances, many of which we are probably not aware.

Takeaway: Most contractors want to get paid; they aren’t interested in foreclosing if it’s not necessary. Most construction project owners don’t want to lose materials and improvements furnished by contractors. Properly executed bonds are a good way to achieve both ends—they can protect a project owner from foreclosure and contractors from not getting paid.

Photo Credit: Pulpolux !!! via photopincc

Broken Ground

The new year is almost here. What better time to launch a new blog? We’ve broken ground on the Texas Construction and Real Estate Blog. Stay tuned for news, trends, tips, opinions, checklists and other tools related to Texas construction and real estate. No information on this blog is intended as legal advice, but we hope our readers will find the posts informative, useful from an educational standpoint, and perhaps, just perhaps, occasionally entertaining.