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Kuentz v. Cole Systems Group, Inc.

Court of Appeals of Texas, Fourteenth District

November 9, 2017


          Opinion of July 20, 2017 Withdrawn

         On Appeal from the 269th District Court Harris County, Texas Trial Court Cause No. 2013-45172

          Panel consists of Justices Boyce, Busby, and Wise.


          Ken Wise, Justice.

         We overrule appellants' motion for rehearing, withdraw our opinion of July 20, 2017, and issue this substitute opinion in its place.

         Three months after being rehired by a car dealership, a salesman shot and killed his sales manager at work. The appellants, the manager's family, sued the salesman, several dealership-related entities, and the appellee, an employment screening company that performed a pre-employment background check on the salesman. The trial court granted the employment screening company's traditional and no-evidence summary judgment motion on the appellants' negligence claims. On appeal, the appellants contend that under the circumstances of this case, the company had a duty to exercise reasonable care in performing its background screening and to disclose what it actually knew about the salesman to the dealership. The appellants also contend that that they presented legally sufficient evidence that the company breached its duties and that its negligence proximately caused the sales manager's death. We affirm.

         I. Factual and Procedural Background

         In 2012, Robert Kuentz was working as a sales manager for Mac Haik Chevrolet, Ltd. at its car dealership on the Katy Freeway in Houston. Keith Grimmett worked there as a salesman. On November 30, 2012, one day after a confrontational sales meeting, Grimmett went to Kuentz's office, pulled out a gun, and shot him in the neck. Kuentz was taken to the hospital, where he died on December 3, 2012. Grimmett was later indicted and pleaded guilty to first degree murder. He is currently in prison serving a life sentence.

         Cole Systems Group, Inc., d/b/a The Cole Group (Cole), is a pre-employment background screening company hired by Mac Haik to screen individuals applying for employment at the dealership. In exchange for an $85 fee, Cole would perform a set of services consisting of an interview of the applicant, a criminal records check of the counties in which the applicant lived and worked, a drug test, and a social security verification. Cole also provided a report summarizing the results of the screening to Mac Haik, but did not make hiring recommendations.

         In 2006, Grimmett applied for a position as a car salesman at Mac Haik. Cole screened Grimmett at Mac Haik's request. Cole reported that Grimmett's drug test was negative and that no criminal records on Grimmett were located. Cole also reported an inconsistency in Grimmett's answers regarding the reason he left his job at Don Brown Chevrolet in 2005. Grimmett was hired, but he eventually left Mac Haik on good terms and was considered eligible for rehire.

         After leaving Mac Haik, Grimmett moved to Missouri, where he worked at other car dealerships. In early 2012, Grimmett returned to Houston and applied for a sales job at Allen Samuels Chevrolet. Allen Samuels also used Cole's services and referred Grimmett to Cole for screening. Cole performed its standard services and provided Allen Samuels with a report of its findings. Allen Samuels hired Grimmett, but he quit after a short time.

         In August 2012, Grimmett re-applied with Mac Haik for a sales job. After completing Mac Haik's rehiring process, Grimmett was again referred to Cole for screening. Cole reported that Grimmett's social security number had been verified, his drug test was negative, and there were no criminal records found in Harris County or in the two counties in Missouri where Grimmett had lived and worked. Cole also reported that certain answers Grimmett provided during his interview were inconsistent with information he had provided previously. Specifically, Cole reported that Grimmett: had been terminated from Mid Rivers Chrysler Jeep after he told the used car manager not to yell at him; had left his job at Don Brown Chevrolet under what he called a "mutual agreement" after a customer complained that he was unprofessional; and stated that his position at a jewelry store extended through August 2011 when it actually ended in June 2010.

         Thus, contrary to the information Cole learned from Grimmett and reported to Mac Haik, Grimmett represented to Mac Haik in his employment application that he had never been fired from a job or asked to resign. Grimmett also misstated the duration of his employment with one employer, which masked an extended gap in his employment history. Terry Shields, the president of Mac Haik Automotive and the Mac Haik officer tasked with ultimate hiring authority for rehires like Grimmett, confirmed that providing false or misleading information in the application process was a ground for Mac Haik to deny or terminate employment. And, Susan Hensley, Mac Haik's director of human resources, testified without contradiction that it was Mac Haik's responsibility to verify the details of a potential employee's previous employment. Nevertheless, when questioned about the discrepancies identified in Cole's report, Shields stated that he was sure Mac Haik "didn't look quite as hard" at Grimmett's application because Grimmett had worked for Mac Haik before. Shields did not know if any managers or human resources personnel ever followed up on the information Cole provided, and there are no records showing that Mac Haik investigated Grimmett further. Nor did Mac Haik request any additional services from Cole.

         To be employed as a car salesperson, Grimmett was required to be licensed by the City of Houston. To obtain a license, Grimmett was required to pass yet another criminal records search-this one performed by the Houston Police Department using the non-public Federal Bureau of Investigation database to locate "[a]ny offense involving violence to any person." Grimmett was issued a license.

         Relying largely on Grimmett's positive employment history with the company, Mac Haik rehired Grimmett. Three months later, Grimmett killed Kuentz.

         Appellant Heather Tenini Kuentz, Kuentz's widow, sued several Mac Haik entities and Cole for negligence and gross negligence on behalf of herself, Kuentz's estate, and their minor child. She also sued Grimmett for compensatory damages as a result of his conduct. Robert Kuentz's parents intervened in the lawsuit to assert their claims as wrongful death beneficiaries.

         Following discovery, Cole and the Mac Haik entities moved for summary judgment. Cole filed a combined traditional and no-evidence summary judgment motion challenging each element of the appellants' negligence and gross negligence claims. First, Cole asserted that it owed no duty to Kuentz as a matter of law, whether generally or based on a negligent undertaking theory; there was no evidence that Cole breached any duty; and no evidence that Cole's actions proximately caused Kuentz's death.

         The appellants filed a response in opposition, and both parties submitted substantial evidence in support of their respective positions. Cole also filed objections to several of Kuentz's exhibits, including the affidavits of Kuentz's experts. The trial court held a hearing and took the motions under advisement.

         On November 4, 2015, the trial court signed a "Partial Judgment" in Cole's favor. By separate orders, the trial court partially granted and partially denied the motion filed by the Mac Haik entities, leaving the primary Mac Haik defendants in the case for trial.

         Appellants and Mac Haik moved jointly to sever the claims against Cole and to abate the trial to facilitate appellate review of the summary judgment ruling. The trial court denied the joint motion. The appellants then non-suited their claims against Mac Haik and Grimmett without prejudice, making the order granting summary judgment in favor of Cole final and appealable.

         II. Issues on Appeal

         To sustain their negligence claims, the appellants were required to present evidence that Cole violated a legal duty owed to Kuentz, a breach of that duty, and damages proximately caused by that breach. See, e.g., Nabors Drilling, U.S.A. v. Escoto, 288 S.W.3d 401, 404 (Tex. 2009). The appellants challenge the trial court's ruling as to each of these elements of their claims.

         In their first issue, the appellants argue that Cole owed a duty to exercise reasonable care in its screening of potential employees on behalf of Mac Haik based on two negligent undertaking theories, and a theory that Cole owed a duty to disclose what it actually knew about Grimmett. Because Cole owed no legal duty to undertake additional duties beyond those it affirmatively agreed to perform for Mac Haik, and there is no evidence that Cole negligently performed the duties it affirmatively agreed to undertake, we hold that the trial court did not err by granting summary judgment on the appellants' claim that Cole violated a legal duty owed to Kuentz, and do not reach the appellants' remaining issues.

         A. Standard of Review

         We review the trial court's grant of summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). In reviewing either a traditional or a no-evidence summary judgment motion, we take as true all evidence favorable to the nonmovant and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Navy v. Coll. of the Mainland, 407 S.W.3d 893, 898 (Tex. App.-Houston [14th Dist.] 2013, no pet.).

         After an adequate time for discovery, a party without the burden of proof may, without presenting evidence, seek summary judgment on the ground that there is no evidence to support one or more essential elements of the nonmovant's claim or defense. Tex.R.Civ.P. 166a(i). A no-evidence motion for summary judgment must be granted if: (1) the moving party asserts that there is no evidence of one or more specified elements of a claim or defense on which the adverse party would have the burden of proof on at trial and (2) the respondent produces no summary judgment evidence raising a genuine issue of material fact on those elements. Navy, 407 S.W.3d at 898; see Tex. R. Civ. P. 166a(i). The evidence raises a genuine issue of fact if ...

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