Tonya Bauer, Individually and as Guardian of the Person and Estate of Emily Bauer, an Incapacitated Person, and William Bryant v. Gulshan Enterprises, Inc., Bin Enterprises, Inc., Khalid Khan and Phillips 66 Company

Opinion issued December 31, 2020

In The

Court of Appeals
For The

First District of Texas
————————————
NO. 01-18-00136-CV
———————————
TONYA BAUER, AS GUARDIAN OF THE PERSON AND ESTATE OF
EMILY BAUER, AN INCAPACITATED PERSON, Appellant

V.

GULSHAN ENTERPRISES, INC., Appellee

On Appeal from the 190th District Court
Harris County, Texas
Trial Court Case No. 2014-71024-B

DISSENTING OPINION ON REHEARING

I respectfully dissent from the panel’s denial of rehearing of this important

negligent undertaking case for the reasons set out herein and in my dissenting

opinion of February 27, 2020, which I hereby incorporate by reference. In my view,
the majority misconstrues and misapplies the law, requiring Texas Supreme Court

correction and clarification of the law that applies when a defendant has undertaken

to render services to another party that it should recognize as necessary for the

protection of a third person and breaches that duty by negligently failing to exercise

reasonable care in performing its undertaking, to the harm of the third person.

Here, defendant Gulshan Enterprises, Inc., as Marketer of ConocoPhillips

products, expressly assumed a duty to use reasonable care to ensure that each

Marketer Supplied Outlet to which it supplied ConocoPhillips products—including

the ConocoPhillips service station and Handi-Stop #79 where drugs were openly

displayed, purchased by teenagers in the community, and consumed by the teenaged

victim in this case, Emily Bauer, to her great harm—“not engage, permit, or

cooperate in any conduct that reflects unfavorably on the reputation of

ConocoPhillips in the community . . . or . . . impairs the goodwill associated with

the ConocoPhillips Brands.” As part of that undertaking, Gulshan also expressly

assumed the duty “not [to] permit on, in[,] or from [Handi-Stop #79] . . . the sale or

use of illegal drugs or drug paraphernalia.” This is the exact assumed duty Gulshan

should have recognized as necessary for the protection of teenagers like Emily Bauer

in the community but negligently breached, causing the very harm that Emily

suffered, with its concurrent damage to ConocoPhillips’ reputation and goodwill, as

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more fully set out in my February 27, 2020 dissenting opinion. See Dissenting

Opinion at 7–8.

The majority, however, disregards the plain language of the governing

contract between ConocoPhillips and Gulshan; conflates the law of negligent

undertaking, premises liability, and simple negligence; finds that Gulshan had no

right of control of the premises of the Handi-Stop #79, where Emily Bauer’s injury

occurred, as required for premises liability but not for liability for a negligent

undertaking; and concludes that Gulshan assumed no duties with respect to those

premises. Accordingly, the majority misses the law, pled by Bauer, that applies to

this case, which is currently set out in section 324A of the Restatement (Second) of

Torts. This section has been adopted by the Texas Supreme Court and is still being

developed by that court and the intermediate appellate courts.

Section 324A provides, in relevant part,

One who undertakes, gratuitously or for consideration, to render
services to another which he should recognize as necessary for the
protection of a third person or his things, is subject to liability to the
third person for physical harm resulting from his failure to exercise
reasonable care to [perform] his undertaking.

See id. at 17 (quoting RESTATEMENT (SECOND) OF TORTS § 324A (1965)); Fox v.

Dallas Hotel Co., 240 S.W. 517, 520–21 (Tex. 1922) (adopting rule underlying

section 324A into Texas law), overruled on other grounds by Burk Royalty Co. v.

Walls, 616 S.W.2d 911 (Tex. 1981); see also Nall v. Plunkett, 404 S.W.3d 552, 555–

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56 (Tex. 2013); Shea v. Travelers Indem. Co., 730 S.W.2d 774, 775–78 (Tex.

App.—Dallas 1987, no writ).

The majority opinion finds no assumed duty on the part of Gulshan to use

reasonable care not to permit the display and sale of illegal drugs at Handi-Stop #79

in its contract with ConocoPhillips, and thus no duty to protect ConocoPhillips’

goodwill and reputation by protecting third persons from physical harm resulting

from its failure to exercise its undertaken duty not to permit the display and sale of

illegal drugs at the Handi-Stop with reasonable care, which it should have

recognized as necessary for the protection of persons like Emily Bauer and thus for

the protection of ConocoPhillips’ goodwill and reputation in the community. In

making these conclusions, the majority opinion directly conflicts with Texas

Supreme Court law adopting and construing the Restatement of Torts and the law

made by the Texas Supreme Court and the appellate courts, cited in my February 27,

2020 dissenting opinion and above, that have continued to develop that law.

As the majority opinion is contrary to controlling law and has the potential to

do much damage to an area of tort law that is still developing, it fully satisfies Rule

56.1 governing considerations in granting supreme court review. Accordingly, I urge

the Texas Supreme Court to grant review of this important case on the construction

of the Restatement (Second) of Torts and its application in Texas law and to reverse

the panel opinion and judgment.

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 Conclusion

I would grant rehearing and would reverse the panel decision for the reasons

set forth above and in my dissenting opinion of February 27, 2020.

Evelyn V. Keyes
Justice

Panel consists of Chief Justice Radack and Justices Keyes and Countiss.

Justice Keyes, dissenting.

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