Agar Corp. v. Electro Circuits Int'l, LLC
| Decision Date | 25 July 2017 |
| Docket Number | NO. 14-15-00134-CV.,14-15-00134-CV. |
| Citation | 529 S.W.3d 559 (Mem) |
| Parties | AGAR CORPORATION, INC., Appellant v. ELECTRO CIRCUITS INTERNATIONAL, LLC and Suresh Parikh, Appellees |
| Court | Texas Court of Appeals |
Matthew A. Kornhauser, Sidney Christian Watts, Dylan Benjamin Russell, Houston, TX, for Appellant.
Kenneth M. Krock, Matthew Buschi, Megan Brown, Terri Silver Morgan Megan Brown, Houston, TX, for Appellees.
The En Banc Court consists of Chief Justice Frost and Justices Boyce, Christopher, Jamison, Busby, Donovan, Brown, Wise, and Jewell.
Rehearing en banc denied.
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 issue1 —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.
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.
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
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
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 acts; and (5) damages as the proximate result.11
The elements include damages the conspiracy proximately caused but not damages caused by one co-conspirator's commission of a tort in furtherance of the conspiracy. If these are the essential elements of a conspiracy claim under Texas law, one might think it is clear that Texas treats conspiracy as an independent claim.
Yet, in other cases, the supreme court has concluded that civil conspiracy is a "derivative tort" and thus a defendant is not liable under a conspiracy theory unless one of the co-conspirators committed some other tort.12 In some cases the high court has noted that civil conspiracy is a means by which a claimant can hold all co-conspirators jointly and severally liable for the torts committed by any co-conspirator in furtherance of the conspiracy.13 In one case, the supreme court expressly said that civil conspiracy can be used as a vicarious-liability theory:
The concept of civil conspiracy is sometimes used by an injured plaintiff as a basis for establishing joint and several tort liability among several parties. To be distinguished from the concept of vicarious liability for concerted action, civil conspiracy "came to be used to extend liability in tort ... beyond the active wrongdoer to those who have merely planned, assisted, or encouraged his acts."14
Though research reveals no case in which the supreme court explicitly says that civil conspiracy may be either a vicarious-liability theory or an independent claim, the high court's use of "sometimes" in the above-cited quotation suggests that perhaps claimants can choose to use civil conspiracy in either way.15 But, this conclusion is undermined by the high court's holdings that civil conspiracy failed as a matter of law because the claimant did not establish any other tort, without any mention that the claimant had chosen to use civil conspiracy as a vicarious-liability theory, as opposed to as an independent claim.16
So, though we have no shortage of Texas case law on civil conspiracy, we lack clarity on the nature of it. We do not know whether civil conspiracy is a vicarious-liability theory, an independent claim, or both.17 This uncertainty becomes a problem in determining which statute of limitations applies to civil conspiracy.
If civil conspiracy is an independent tort claim that a claimant may plead and prove without the need to rely on any other tort, it makes sense that civil conspiracy would have its own statute of limitations that would govern all conspiracy claims, as the Mayes court concluded.18 But, if civil conspiracy is a vicarious-liability theory, it would not make sense for a two-year statute of limitations to apply to all liability based on conspiracy, even though the underlying tort in some cases may be governed by a one-year statute of limitations and in other cases by a fifteen-year statute of limitations.19
If the Texas Legislature has reached the public-policy judgment that libel claims should be brought within one year of accrual, it would be incongruous to allow claimants two years to seek recovery based on conspiracy to commit libel.20 Likewise, if the Texas Legislature has decided as a matter of public policy that battery claims arising as a result of conduct that violates Penal Code section 22.011(a)(2) () may be brought within fifteen years of accrual, it would strike most as bizarre and bewildering to allow claimants only two years to seek recovery based on conspiracy to commit this type of battery.21 A number of states that treat civil conspiracy as a vicarious-liability theory have concluded that the statute of limitations for the underlying tort applies to any attempt to impose vicarious liability on a co-conspirator for that tort liability.22
If claimants could choose to assert civil conspiracy as an independent tort or as a vicarious-liability theory, it would make sense to apply the same statute of limitations whenever claimants asserted civil conspiracy as an independent claim, but it would be problematic to do so when claimants used civil conspiracy as a vicarious-liability theory.
Until the Supreme Court of Texas brings clarity to this muddled area of Texas law and...
To continue reading
Request your trial
-
Agar Corp. v. Electro Circuits Int'l, LLC
...claims, even though the logic for that rule might reasonably be questioned. 529 S.W.3d 559, 563–64 (Tex. App.—Houston [14th Dist.] 2017) (Frost, C.J., concurring in order denying rehearing en banc). Having never passed on the question, we granted Agar's petition to consider the relevant sta......
- Merrit v. State