Arbitrator Finds Lewis Energy Destroyed Evidence Involving Injured Worker, Awards $1.2 Million

San Antonio-based Lewis Energy Group destroyed evidence involving an oil field worker who was injured in 2014 when an oil and gas pipe failed, an arbitrator found this month.

The arbitrator awarded Johnathan David Rice, who was 58 at the time of the accident, slightly more than $1.2 million in compensation for his injuries.

But it’s the actions of Lewis Energy and related companies that make the case noteworthy.

Arbitrator Thomas J. Mitchell of Austin ruled that facts in the case “support a finding of intentional spoliation” by Lewis Energy.

David Ortega, a lawyer for Lewis Energy, said he couldn’t comment on the arbitrator’s decision because of confidentiality provisions to the award. He said he believes the other side has breached the confidentiality provisions. Lewis Energy expects to comment on the arbitrator’s findings at a later time, he added.

Mitchell’s ruling was attached to a motion filed Thursday in Bexar County District Court by Rice’s lawyers asking a judge to confirm the award. A hearing on the request had been set for Wednesday but has been rescheduled for May 22.

Ian McLin, an attorney for Rice, had no comment Monday.

Rice of San Antonio worked for Lewis Resource Management in January 2014 when he and his supervisor Antonio Salinas were directed by the company to restart production from a gas well in Webb County. The well had been shut “due to over pressure in the flow line,” Mitchell wrote in his 19-page arbitration award.

Salinas believed the problem was caused by ice in the line and decided to release gas from a section of the pipe.

As Salinas opened the valve, a pipe broke at the thread, releasing pressurized gas and fluids, according to facts of the case in Mitchell’s May 4 ruling.

Mitchell cited Lewis Energy’s investigation report of the incident, which found that as Salinas gave a final push to open the valve, the pipe broke off at the threaded base — resulting in the sudden release of pressurized gas.

Salinas spotted Rice on the ground, unconscious, blown 15 to 25 feet from where he had been standing, according to Mitchell’s ruling. Rice was airlifted to San Antonio Military Medical Center, where a CT scan detected bleeding in the brain. He was diagnosed with a concussion and closed head injury, and suffered a right wrist fracture.

Rice was discharged from SAMMC the following day, but he reported numerous problems at home, including headaches, double vision and memory issues. He has had rehabilitation and treatment but has not improved, Mitchell said. Rice did not return to work at Lewis Enegy.

Rice sued Lewis Energy, Lewis Resource Management, Lewis Petro Properties and two Lewis partnerships over his injuries in 2015 in Bexar County District Court. The claims include gross negligence and premises liability. Lewis Energy later requested the matter be arbitrated, which a judge granted.

An expert witness for Rice said he suffered a “traumatic brain injury,” a finding disputed by Lewis Energy.

In his ruling, Mitchell noted that Lewis Energy “failed to take any steps to ensure the preservation of the failed equipment” despite company President Craig Rosenstein and General Counsel Anthony “Tony” Trevino Jr. having “direct knowledge” of the accident and injury the day they occurred.

Mitchell added that Rice and his wife both testified that Lewis Energy retained the pipe in question. But Mitchell found the company “deliberately failed to produce it in response to discovery requests.”

Lewis Energy’s own investigation found the pipe was too long and too thin but added the cause for the pipe’s failure is “unknown,” Mitchell reported.

Mitchell took issue with that conclusion. “The reason it is unknown is that the … (pipe) which failed and broke off at its threaded base was not produced for inspection, testing and expert analysis,” he wrote.

Lewis Energy immediately replaced 300 similar pipes following the accident yet “failed to retain even one for analysis,” Mitchell said.

“This indicates either a lack of interest in or failure to appreciate the importance of evidence preservation,” he wrote.

“Together this evidence reveals a pattern of behavior designed to prevent any direct examination and analysis of the equipment which failed and caused serious personal injury” to Rice, Mitchell added.

Mitchell also noted the Lewis Petro Properties, which constructed the Webb County facility, did not utilize an engineered design. In fact, he said, it was built with no written plans.

Rice sought $9.3 million in damages, mostly for future medical expenses. Lewis Energy countered that he should receive just under $576,000.

“He is not the man he was before the incident,” Mitchell said, noting Rice’s various ailments.

Video surveillance presented during the arbitration, though, showed Rice driving and running errands without any difficulty. In addition, Mitchell said he found it “curious that (Rice’s) speech and demeanor change when he is in the presence of his wife and when she is not around.”

Source: San Antonio Express News