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Durham v. Accardi

Court of Appeals of Texas, Fourteenth District

October 10, 2019


          On Appeal from the 261st District Court Travis County, Texas Trial Court Cause No. D-1-GN-17-006778

          Panel consists of Justices Wise, Zimmerer, and Spain (Spain, J., dissenting).


          Jerry Zimmerer, Justice.

         Appellant Christopher Durham appeals the summary judgment granted in favor of appellees, Barbara Accardi and Jules Accardi, on his claims against them. Finding no error, we affirm the trial court's summary judgment.


         Durham worked for Austin Budget Signs, Inc. ("ABS") as an at-will employee. ABS did not subscribe to workers' compensation insurance at the time of the events underlying this appeal. Durham was not employed by either Barbara Accardi or Jules Accardi in their individual capacities at any time.

         ABS sent Durham to perform maintenance work on an elevated lighted sign used by STN La Fuenta Restaurant, LLC (La Fuenta). Durham was required to work from an elevated bucket on a lift truck to perform the job. Durham was removing the top 15-foot long angle iron frame from the sign when the plastic sign face started to bend and twist away from the sign frame. Worried that the sign face would fall to the ground and break, Durham attempted to reinstall the top angle iron frame onto the sign. While Durham was struggling to do that, the angle iron frame came into contact with a nearby power line. Durham felt a sharp pain and he caught on fire. Unable to control his body movements, Durham spun out of the elevated bucket and fell about 25 feet to the ground. Durham suffered serious burns and other injuries as a result of the incident.

         Durham filed suit against ABS, Barbara Accardi, and Jules Accardi for negligence, negligence per se, and gross negligence.[1] Durham alleged that all three defendants were liable for breaches of duties directly owed to him. Durham also alleged that the Accardis were liable for his injuries caused by ABS's negligence because they were the alter ego of ABS and also because ABS was "a sham entity used to perpetrate a fraud."

         The Accardis moved for traditional and no-evidence summary judgment on Durham's claims against them. Among other grounds, the Accardis asserted that Durham had no evidence that either Accardi owed him a duty in their individual capacities, that they breached a duty in their individual capacities, or that any breach of a duty proximately caused Durham damages. The trial court granted the Accardis' motion without specifying the grounds. The trial court subsequently granted Durham's unopposed motion to sever, making the trial court's summary judgment order final and appealable. See Lehmann v. Har-Con Corp., 39 S.W.3d 191, 205 (Tex. 2001). This appeal followed.[2]


         Durham raises three issues on appeal challenging the trial court's summary judgment. In his first issue, appellant argues that the trial court erred when it granted the Accardis summary judgment on his veil piercing claims. In his second and third issues, appellant asserts that Jules Accardi and Barbara Accardi each owed him individual duties of care. We collectively address appellant's second and third issues first.

         I. Standard of review

         We review the trial court's grant of summary judgment de novo. See, e.g., Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). We consider all of the summary judgment evidence in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if a reasonable factfinder could and disregarding contrary evidence unless a reasonable factfinder could not. See Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006). When a party moves for summary judgment on both traditional and no-evidence grounds, we ordinarily address the no-evidence grounds first. See Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). If the trial court grants summary judgment without specifying the grounds, we affirm the judgment if any of the grounds presented are meritorious. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001) (per curiam). And, if an appellant does not challenge every possible ground for summary judgment, we will uphold the summary judgment on the unchallenged ground. Agarwal v. Villavaso, No. 03-16-00800-CV, 2017 WL 3044545, at *3 (Tex. App.—Austin July 13, 2017, no pet.) (mem. op.).

         In a no-evidence motion for summary judgment, the movant represents that there is no evidence of one or more essential elements of the claims for which the nonmovant bears the burden of proof at trial. Tex.R.Civ.P. 166a(i). The burden then shifts to the nonmovant to present evidence raising a genuine issue of material fact as to the elements specified in the motion. Tamez, 206 S.W.3d at 582. Evidence raises a genuine issue of material fact if reasonable and fair-minded jurors could differ in their conclusions in light of all the summary judgment evidence. See Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007) (per curiam).

         II. The Accardis' motion for summary judgment on Durham's claims against them in their individual capacities must be affirmed because Durham did not address all summary judgment grounds asserted by the Accardis in their motion.

         Durham asserted claims for negligence, negligence per se, and gross negligence against both Barbara Accardi and Jules Accardi in their individual capacities. The elements of negligence are a legal duty, breach of that duty, and damages proximately caused by the breach. IHS Cedars Treatment Ctr. of DeSoto, Tex., Inc. v. Mason, 143 S.W.3d 794, 798 (Tex. 2004). Negligence per se is not an independent cause of action. Weirich v. IESI Corp., No. 03-14-00819-CV, 2016 WL 4628066, at *2 (Tex. App.—Austin Aug. 31, 2016, no pet.) (mem. op.). It is instead, a method of proving a breach of duty, a requisite element of any negligence cause of action. Id. Finally, a plaintiff must prove all elements of negligence as a prerequisite to a gross negligence claim. Godines v. Precision Drilling Co., L.P., No. 11-16-00110-CV, 2018 WL 2460302, at *6 (Tex. App.— Eastland May 31, 2018, no pet.) (mem. op.) (citing Gonzalez v. VATR Constr., LLC, 418 S.W.3d 777, 789 (Tex. App.—Dallas 2013, no pet.)).

         The Accardis argued in their no-evidence motion for summary judgment that Durham had no evidence that they individually owed him a duty, breached that duty, or that the breach proximately caused him damages. All of Durham's claims against the Accardis in their individual capacities include each of these elements. On appeal, Durham argues only "that there is a scintilla of evidence that [the Accardis] owed a duty of reasonable care to Durham." Durham did not address on appeal the separate grounds raised by the Accardis that he had no evidence that they had breached a duty, or that any breach had proximately caused him damages. Because he did not, we must affirm the summary judgment on his negligence, negligence per se, and gross negligence claims against them.[3] See Greb v. Madole, No. 05-18-00467-CV, 2019 WL 2865269, at *9 (Tex. App.—Dallas July 3, 2019) (mem. op.) ("Here, we conclude that summary judgment on Greb's negligence claim against Attorneys was proper. Therefore, Greb's gross negligence claim also fails."); Haubold v. Medical Carbon Research Institute, LLC, No. 03-11-00115- CV, 2014 WL 1018008, at *4 (Tex. App.—Austin March 14, 2014, no pet.) (mem. op.) ("Because Haubold has not challenged all independent bases or grounds that could, if meritorious, support the partial summary judgment dismissing his claims, we must affirm the trial court's partial summary judgment."). We overrule Durham's second and third issues.

         III. The trial court did not err when it granted the Accardis' motion for summary judgment on Durham's piercing the corporate veil claims.

         Durham argues in his first issue that the trial court erred when it granted the Accardis' motion for summary judgment on his disregarding the corporate form claims. A corporation is presumed to be a separate entity from its officers and shareholders. Washington DC Party Shuttle, LLC v. IGuide Tours, LLC, 406 S.W.3d 723, 738 (Tex. App.—Houston [14th Dist.] 2013, pet. denied) (en banc) (citing Grain Dealers Mut. Ins. Co. v. McKee, 943 S.W.2d 455, 458 (Tex. 1997)). As a result, the corporate form normally insulates shareholders, officers, and directors from liability for corporate obligations. Willis v. Donnelly, 199 S.W.3d 262, 271 (Tex. 2006). Courts may disregard the corporate form if (1) the corporation is the alter ego of its owners or shareholders, (2) the corporation is used for an illegal purpose, or (3) the corporation is used as a sham to perpetrate a fraud. Lastor v. Jackson, No. 09-18-00146-CV, 2019 WL 613618, at *3 (Tex. App.—Beaumont Feb. 14, 2019, no pet.) (mem. op.). Only the first and third methods are relevant here because they were the only theories Durham specifically alleged in his trial court pleadings. See Town Hall Estates-Whitney, Inc. v. Winters, 220 S.W.3d 71, 86 (Tex. App.—Waco 2007, no pet.) (citing Mapco, Inc. v. Carter, 817 S.W.2d 686, 688 (Tex. 1991)).

         A. The trial court did not err when it granted the Accardis' no- evidence motion for summary judgment on Durham's alter ego cause of action.

         Alter ego liability permits a plaintiff to pierce an entity's "corporate veil" and hold the entity's shareholders, directors, and officers individually liable for the entity's obligations. Castleberry v. Branscum, 721 S.W.2d 270, 271-72 (Tex. 1986); see Dodd v. Savino, 426 S.W.3d 275, 291-92 (Tex. App.—Houston [14th Dist.] 2014, no pet.) (examining alter ego liability in appeal from no-answer default judgment). Courts will disregard the corporate fiction "when the corporate form has been used as part of a basically unfair device to achieve an inequitable result." Castleberry, 721 S.W.2d at 271. "Courts have generally been less reluctant to disregard the corporate entity in tort cases than in breach of contract cases." Lucas v. Tex. Indus., Inc., 696 S.W.2d 372, 375 (Tex. 1984). Nonetheless, the corporate fiction generally will not be disregarded absent exceptional circumstances. Id. at 374.

         Alter ego veil piercing is appropriate (1) where a corporation is organized and operated as a mere tool or business conduit of another, (2) there is such "unity between corporation and individual that the separateness of the corporation has ceased," and (3) holding only the corporation or individual liable would result in injustice. See Castleberry, 721 S.W.2d at 271-72; see also SSP Partners v. Gladstrong Invs. (USA) Corp., 275 S.W.3d 444, 454-55 (Tex. 2008); Goldstein v. Mortenson, 113 S.W.3d 769, 781 (Tex. App.—Austin 2003, no pet.). Alter ego is shown from the total dealings of the corporation and the individual, including the degree to which corporate formalities have been followed and corporate and individual property have been kept separately; the amount of financial interest, ownership, and control the individual maintains over the corporation; and whether the corporation has been used for personal purposes. Castleberry, 721 S.W.2d at 272; Goldstein, 113 S.W.3d at 781.

         Evidence that will support an alter ego finding includes (1) the payment of alleged corporate debts with personal checks or other commingling of funds, (2) representations that the individual will financially back the corporation, (3) the diversion of company profits to the individual for the individual's personal use, (4) inadequate capitalization, and (5) any other failure to keep corporate and personal assets separate. Burchinal v. PJ Trailers-Seminole Mgmt. Co., LLC, 372 S.W.3d 200, 218 (Tex. App.—Texarkana 2012, no pet.) (citing Mancorp, Inc. v. Culpepper, 802 S.W.2d 226, 229 (Tex. 1990)). An individual's role as an officer, director, or majority shareholder of an entity alone is not sufficient to support a finding of alter ego. Cappuccitti v. Gulf Indus. Prods., Inc., 222 S.W.3d 468, 482 (Tex. App.—Houston [1st Dist.] 2007, no pet.). In addition, while a corporation's capitalization can be a consideration in deciding whether to pierce the corporate veil in a tort case, the corporation's financial strength or weakness is generally only one factor to be considered. See Castleberry, 721 S.W.2d at 272 (alter ego is shown from the total dealings of the corporation and the individual); Feigin v. Robinson, No. 05-97-01500-CV, 1998 WL 375458, at *6 (Tex. App.—Dallas July 8, 1998, no pet.) (not designated for publication) ("[G]enerally, the financial strength or weakness of the corporation is only one factor to be considered."); Tigrett v. Pointer, 580 S.W.2d 375, 382 (Tex. App.—Dallas 1978, writ ref'd n.r.e.) ("Grossly inadequate capitalization, however, as measured by the nature and magnitude of the ...

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