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Agar Corporation, Inc. v. Electro Circuits International, LLC

Court of Appeals of Texas, Fourteenth District

July 25, 2017

AGAR CORPORATION, INC., Appellant
v.
ELECTRO CIRCUITS INTERNATIONAL, LLC AND SURESH PARIKH, Appellees

         On Appeal from the 11th District Court Harris County, Texas Trial Court Cause No. 2008-20480A

          ORDER

          PER CURIAM

         Appellant Agar Corporation, Inc.'s Motion for Rehearing En Banc is denied.

         CONCURRING OPINION ON DENIAL OF MOTION FOR REHEARING EN BANC

         I join the court's decision to deny appellant Agar Corporation, Inc.'s motion for rehearing en banc. I write separately to address the statute-of-limitations issue[1] Agar's argument that the en banc court should overrule the precedent in Mayes v. Stewart, [2] step away from the holding that a two-year statute of limitations always applies to civil conspiracy, and instead hold that civil conspiracy is subject to the statute of limitations governing the underlying tort on which the civil conspiracy is based.

         Agar roots its argument in the premise that civil conspiracy is a vicarious-liability theory rather than an independent tort. The rule Agar promotes makes sense. It may be the sounder rule, but Texas law is unclear as to whether civil conspiracy is a vicarious-liability theory, an independent claim, or both. Until the Supreme Court of Texas clarifies this issue, it is hard to tell what statute of limitations applies to civil conspiracy.

         Eleven sister courts of appeals have agreed with the Mayes holding on the statute of limitations for civil conspiracy, including the First Court of Appeals with whom we share a courthouse in downtown Houston and appellate jurisdiction in a ten-county region. Stepping away from the Mayes holding would mean stepping away from uniformity in the law within our shared jurisdiction.

         Though Agar proposes the better rule, adopting it is not the better choice. Doing so would create a split of authority in the First-Fourteenth shared jurisdiction and that would cause more harm than keeping the inferior rule. So, rather than dissent to the denial of en banc review and advocate for this court to embrace a new, sounder rule, I instead urge the Supreme Court of Texas to clarify the law in this murky area and announce this new rule for applying the statute of limitations to civil conspiracy.

         Civil Conspiracy: A Muddled Place in Texas Jurisprudence

         Agar asks the en banc court to overrule Mayes v. Stewart, [3] a binding precedent this court followed in Navarro v. Thornton.[4] According to Agar, under Texas law civil conspiracy is a vicarious-liability theory that depends on an underlying tort, and civil conspiracy is not an independent claim. Based on this premise, Agar says it is absurd to apply the two-year statute of limitations to bar liability based on civil conspiracy when a three-year or four-year statute of limitations governs the underlying torts on which Agar bases its claims of conspiracy liability, and Agar's claims would be timely under those statutes.

         Though some Texas cases support Agar's premise, it is not clear that the premise is correct. Texas law on this point is uncertain.

         Civil Conspiracy as a Vicarious-Liability Theory

         Under the law of most American states, civil conspiracy is a vicarious-liability theory under which a co-conspirator who is not liable for a tort by its own conduct may be held jointly and severally liable with another co-conspirator for the tort liability incurred by the other co-conspirator's conduct.[5] Under this approach to civil conspiracy, if a claimant proves the elements needed to show a conspiracy between two alleged co-conspirators and if the claimant proves that one co-conspirator is liable in tort based on conduct in furtherance of the conspiracy, then the other co-conspirator is jointly and severally liable for the first co-conspirator's tort liability, except as to any exemplary damages assessed against the first co-conspirator.[6]

         Civil Conspiracy as an Independent Claim

         A minority of American states treat civil conspiracy as an independent claim, under which a claimant who proves the essential elements of a conspiracy claim may recover the damages the claimant sustained as a proximate result of the conspiracy.[7]Under this approach, liability under a conspiracy claim is not premised on liability for any other tort.[8]

         Civil Conspiracy as a Vicarious-Liability Theory or an Independent Claim, or Both

         Theoretically, a state also could allow claimants to use civil conspiracy as either a vicarious-liability theory or an independent claim, or both, though research has not revealed any jurisdiction that employs this approach.

         It is unclear where Texas falls - whether civil conspiracy is a vicarious-liability theory, an independent claim, or both. Though the Supreme Court of Texas does not appear to have stated expressly that civil conspiracy is an independent claim, in some cases the high court has indicated that a party may have conspiracy liability in the absence of liability for any other tort, thus suggesting that conspiracy is an independent claim.[9]

         In various cases decided in the last 35 years, the supreme court has set forth five essential elements of a conspiracy claim.[10] For example, in Massey v. Armco Steel Company, the high court called civil conspiracy a "cause of action" and proclaimed:

The essential elements are: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of minds on the object or course of action; (4) one or more unlawful, overt ...

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