Summary
applying Leitch and finding that plaintiff failed to allege that individual manager of company for whom he was performing welding work owed an independent duty of care to him apart from duty owed by manager's company
Summary of this case from ROSA v. AQUALINE RESOURCES, INC.Opinion
Civil Action No: SA-04-CA-24-XR
March 15, 2004
ORDER
On this date, the Court considered Plaintiff's Motion to Remand, filed February 6, 2004, and Defendants' Response, filed February 27, 2004. After careful consideration, the Court will DENY the motion.
Facts
On December 9, 2003, Plaintiff filed this suit in the 57th Judicial District Court, Bexar County, against Cott Beverages, and Rico. Lalli, a manager of Cott Beverages, after he sustained injuries while performing welding work for his employer, AD Custom Welding, at Cott Beverages' plant. Plaintiff alleges that Lalli, as a manager of Cott Beverages, had advised the owner and managers of AD Custom Welding that he would shut down operations at the plant in order for AD to perform its contracted work. Plaintiff further alleges that, as he was performing his work for the Defendants, Lalli permitted the commencement of operations prior to the agreed time, causing an unexpected build up of pressure on a line on which Plaintiff was working, and a plug within the line shot out and struck Plaintiff on the side of his face. Plaintiff asserts causes of action for personal injuries based on negligence and res ipsa loquitor. According to the Petition, Plaintiff is a resident of Texas, Cott Beverages is a Georgia corporation, and Lalli is a resident of Texas.
Defendant Cott was served December 12 and Lalli was served on December 18, and they timely removed this action on January 9, 2004 on the basis of diversity jurisdiction. See 28 U.S.C. § 1332, 1441(a). Defendants contend that Rico. Lalli was fraudulently joined as a defendant, "since no basis of fact or law for any recovery by Plaintiff against Rico. Lalli appears in Plaintiff's Petition, nor is it possible for Plaintiff to establish a valid cause of action against Rico. Lalli in this action." The presence of non-diverse defendant Lalli would destroy diversity jurisdiction. Thus, this Court has jurisdiction over this case only if Defendants establish that Lalli was fraudulently joined.
Analysis
Defendants bear the burden of establishing that Lalli was fraudulently joined. Hart v. Bayer Corp., 199 F.3d 239, 246(5th Cir. 1999). "To prove their allegation of fraudulent joinder, [removing parties] must demonstrate that there is no possibility that [plaintiff] would be able to establish a cause of action against [the non-diverse defendant] in state court." Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42 (5th Cir. 1992). The court must initially resolve all disputed questions of fact and all ambiguities in the controlling state law in favor of the non-removing party. Id. The court then determines whether the plaintiff has any possibility of recovery against the party whose joinder is questioned. Id. Fraudulent joinder claims can be resolved by "piercing the pleadings" and considering summary judgment-type evidence such as affidavits and deposition testimony. Hart, 199 F.3d at 247. Whether a plaintiff could possibly establish a claim against the non-diverse defendant is resolved by reference to state law. Id. Defendants argue that the Texas Supreme Court's decision in Leitch v. Hornsby, 935 S.W.2d 114 (Tex. 1996), establishes that Plaintiff has no possibility of recovery against Lalli because Texas law allows recovery against a corporate agent only when the officer or agent owes an independent duty of reasonable care to the injured party apart from the employer's duty. Plaintiff responds that, although Leitch held that an employer's duty to provide a safe workplace for its employees is not imposed upon the individual corporate officers, "[t]he rule in Texas has always been that an agent is personally liable for his own torts." Light v. Wilson, 663 S.W.2d 813, 815 (Tex. 1983).
In Leitch v. Hornsby, an injured employee brought a negligence action against his corporate employer and two officer, directors, and stockholders in their individual capacities. Plaintiff Hornsby argued that all three were negligent in failing to provide a safe workplace and equipment. The jury found all three defendants liable. On appeal, the court of appeals held that a corporate officer may be personally liable for corporate wrongdoing when the officer is an active participant in the tortious conduct. The Supreme Court reversed, holding that the two officers were not individually liable as a matter of law. In reaching its conclusion, the Court recognized that an employer has a duty to use ordinary care in providing a safe work place, but that duty belongs to the corporation itself, not the individual corporate officers. Leitch, 935 S.W.2d at 117. The Court continued:
A corporate officer or agent can be liable to others, including other company employees, for his or her own negligence. However, individual liability arises only when the officer or agent owes an independent duty of reasonable care to the injured party apart from the employer's duty. For example, an agent whose negligence causes an auto accident may be held individually liable along with his or her employer when driving the court and scope of employment. Because the agent owes a duty of reasonable care to the general public regardless of whether the auto accident occurs while driving for the employer, individual liability may attach. Thus, unless alter ego is established, corporate officers and agent are subject to personal liability for their actions within the employment context only when they breach an independent duty of care.Id. (citations omitted). The Court then concluded that the individual defendants, who were not Hornsby's employers, did not owe him an independent duty of care because Hornsby's employer had the non-delegable duty to use ordinary care in providing a safe workplace. The individual defendants were acting within their capacities as officers of Hornsby's employer and not in their individual capacities, and their alleged actions, whether active or passive, were actions of a corporate officer on behalf of the corporation and were deemed the corporation's actions. Id. at 118. The corporate officers had no individual duty as corporate officers to provide Hornsby with a safe workplace, and the record revealed no other duty breached by the corporate officers. Thus, the corporate officers were not individually liable as a matter of law. Id.
Under Texas law, although Cott Beverages was not Plaintiff's employer, as a premises owner, it has a duty to use reasonable care to make and keep the premises safe for business invitees. See Williams v. Olivo, 952 S.W.2d 523, 527 (Tex. 1997); Koch v. Chapa, 11 S.W.3d 153 (Tex. 1999). A premises owner may be liable for two types of negligence in failing to keep the premises safe: that arising from an activity on the premises, and that arising from a premises defect. Olivo, 952 S.W.2d at 527.
Plaintiff's petition asserts that Defendants were negligent in (1) allowing the commencement of plant operations while the Plaintiff was working on one of the Defendants' plant lines; (2) failing to provide a work environment that was reasonably safe for outside contractors; (3) the failure of the management, particularly Rico. Lalli, to properly supervise plant operations in order to prevent those injuries made the basis of this suit; (4) failing to establish proper training procedures in the commencement of plant operation; (5) hiring and retaining incompetent personnel; and (6) failing to adequately train those individuals employed at the plant. In addition, Plaintiff relies on the doctrine of res ipsa loquitor. The petition further alleges that Lalli was "in the full course and scope of employment with Cott Beverages, Ins. and in the furtherance of the business of Cott Beverages, Inc. at all times mentioned within this Petition" and that Cott is liable under the principle of respondeat superior. Neither side has offered any summary judgment-type evidence, and although Plaintiff has requested a hearing, the Court concludes that it may resolve the motion to remand solely on the pleadings.
Notably absent from the petition is the allegation that Lalli owed an independent duty of reasonable care to Plaintiff apart from Cott's duty. Further, because Plaintiff alleges that Lalli was at all times acting within the scope of his employment, Leitch v. Hornsby precludes recovery against Lalli in his individual capacity.
Plaintiff cites Light v. Wilson, 663 S.W.2d 813, 815 (Tex. 1983), and Miller v. Keyser, 90 S.W.3d 712, 717-18 (Tex. 2002), in support of his argument that an agent is personally liable for his own torts. In Light v. Wilson, the owner of a construction company was sued individually for unconscionable acts and breaches of implied and express warranties in violation of the DTP A. The Court declined to hold the agent individually liable because there was no finding that the agent individually violated the DTPA. Later, in Weitzel v. Barnes, 691 S.W.2d 598, 601 (Tex. 1985), the Court concluded that when corporate officers made affirmative representations in connection with the sale of a home, the agents were personally liable under the DTPA, even though they were acting on behalf of the corporation. In Miller v. Keyser, the Court noted that its holdings in Light and Weitzel"comport with Texas' longstanding rule that a corporate agent is personally liable for his own fraudulent or tortious acts" and concluded that recovery against an agent employee in his individual capacity for misrepresentations under the DTPA was possible. Miller, 90 S.W.3d at 717.
These cases are distinguishable because they do not involve negligence. The Court in Leitch recognized the general rule that "[a] corporate officer or agent can be liable to others . . . for his or her own negligence." But it qualified the rule: "However, individual liability arises only when the officer or agent owes an independent duty of reasonable care to the injured party apart from the employer's duty."
Plaintiff argues that Leitch is not controlling because it "involved liability of a corporate agent to employees of the corporation," whereas in this case, "Plaintiff is a third party" who is not employed by Cott, nor a subordinate employee of Lalli. Thus, Plaintiff claims that, as a third party, he is owed an independent duty of reasonable care by Lalli in his capacity as agent for Cott. Although the facts of Leitch involved an employer's duty to an employee, its language regarding the individual liability of corporate officers and agents was broader than that limited context. In fact, the example it cites concerning employees involved in auto accidents involves third parties, not employees. Thus, Leitch is not limited to the employer-employee context. See, e.g., Palmer v. Wal-Mart Stores, Inc., 65 F. Supp.2d 564 (S.D. Tex. 1999) (applying Leitch and concluding that employee of Wal-Mart could not be individually liable to a customer alleging negligence in slip-and-fall case absent allegation of breach of independent duty).
The Texas Supreme Court issued Williams v. Olivo, 952 S.W.2d 523 (Tex. 1997), the year after Leitch v. Hornsby. In that case, the employee of an independent contractor who was injured on the general contractor's site sued the general contractor and its on-site representative. The Court concluded that the jury charge failed to submit the necessary elements for reeovery against either the general contractor or its representative. The Court noted that, because the plaintiff failed to secure a jury finding about the representative's negligence but did obtain a finding that he was the general contractor's employee, the only liability theory against the general contractor was respondeat superior for the representative's negligence. However, because the representative could not be liable for negligence because of the lack of jury findings, the Court then noted that, "[w]e need not decide whether, under these facts, Graham could incur individual liability" and cited Leitch v. Hornsby.
As noted before, Cott, as the premises owner, has a duty of reasonable care to make and keep the premises safe for business invitees. Plaintiff has not alleged that Lalli, as an employee of Cott acting within the scope of his employment, owed an independent duty of reasonable care to Plaintiff apart from Cott's duty. And, Plaintiff has alleged that Lalli was acting within the course and scope of his employment. Accordingly, the Court concludes that there is no possibility that Plaintiff can recover against Lalli in his individual capacity.
Ignoring the presence of Lalli, this Court concludes that it has subject matter jurisdiction over this case based on diversity jurisdiction, and that removal was proper. Thus, Plaintiff's Motion to Remand (docket no. 7) is DENIED. Plaintiff's Motion for a Hearing on the Motion to Remand (docket no. 9) is also DENIED.