Barrera v. ROSCOE, SNYDER AND PACIFIC RAILWAY CO.

• Decision Date: 09 October 1973
• Docket Number: No. CA 1-559.,CA 1-559.
• Citation: 385 F. Supp. 455
• Parties: Joe T. BARRERA v. ROSCOE, SNYDER AND PACIFIC RAILWAY COMPANY.
• Court: U.S. District Court — Northern District of Texas

385 F. Supp. 455

Joe T. BARRERA v. ROSCOE, SNYDER AND PACIFIC RAILWAY COMPANY.

No. CA 1-559.

United States District Court, N. D. Texas, Abilene Division.

October 9, 1973.

Aubrey L. Roberts, Jr., Sweetwater, Tex., for plaintiff.

D. L. Case, Dallas, Tex., for defendant.

MEMORANDUM OPINION AND ORDER

BREWSTER, District Judge.

The questions now before the Court are raised by post-verdict and pre-judgment motions filed by each of the parties.

The plaintiff brought this action under the Federal Employers' Liability Act (FELA) against the Roscoe, Snyder and Pacific Railway Company (Railroad) to recover damages for personal injuries sustained by him while working as an employee of RSP Railway Equipment Corporation (Equipment Corporation).

The Railroad and the Equipment Corporation were separate corporate entities. During all of its existence, the Railroad had been engaged in the business of a common carrier by railroad, as that term is used in the FELA. The business of the Equipment Corporation has been the repair and major overhaul of railroad cars for common carriers all over the country.

There was no claim that the plaintiff was an employee of the Railroad at the time of his injuries. It was stipulated that at such time he was an employee of the Equipment Corporation actually doing its work. Since the Equipment Corporation was not engaged as a common carrier by railroad, it was eligible to, and did, carry insurance on its employees under the Texas Workmen's Compensation Act. The Railroad, of course, was prohibited from carrying such insurance. With the same lawyer representing him in his workmen's compensation claim as is representing him in this case, the plaintiff filed and prosecuted his claim for such compensation. To do so, he had to assert that he was an employee of the Equipment Corporation. With the competent representation that he had, he was able to make a good settlement of his compensation action for $10,000.00 cash, all medical expenses to the date of the settlement, and future medical expenses for services of a named doctor from the date of the settlement until a specified time in 1973.

Plaintiff sought to overcome the fact that he was not an actual employee of the Railroad on each of the following grounds:

a. The Equipment Corporation was an alter ego of the Railroad on the date of plaintiff's injuries.

b. One of the purposes of the Railroad in the creation of the Equipment Corporation was to enable the Railroad to exempt itself from liability for damages for personal injuries to its employees under the provisions of the FELA.

The case was tried before a jury, and a verdict in the form of answers to special interrogatories was returned. By such answers, the jury found:

1. The Equipment Corporation was an alter ego of the Railroad on the date plaintiff sustained his injuries.

2. The Railroad did not create the Equipment Corporation for the purpose, among others, of enabling the Railroad to exempt itself from liability for damages for personal injuries to its employees under the provisions of the FELA.

3. The plaintiff's employer did not fail to provide him with a reasonably safe place in which to work at the time he was injured.

4. The plaintiff's employer did fail to provide him with reasonably safe equipment with which to work at the time he was injured; and such failure did play some part in bringing about or causing the plaintiff's injuries.

5. The amount of money that would reasonably compensate the plaintiff for his injuries was $5,000.00 for loss of earnings to date of trial and of future earning capacity he would in reasonable probability sustain, together with $2,017.20 to cover his hospital bill, and $1,278.00 for his medical expenses, $645.00 of which was for the services of Dr. Kenneth Scholz and $633.00 for those of Dr. Lloyd M. Garland, all of which damages and expenses totalled $8295.20.

The following motions filed after the return of the verdict are now before the Court:

1. Plaintiff's motion for judgment on the verdict as to liability of the defendant and for new trial as to damages only. By this motion, the plaintiff contends that the liability of the Railroad was established by the jury findings, but that the findings on the damage issues should not be allowed to stand. The contention as to the damages is predicated on the fact that the jury allowed no damages for pain and suffering, even though there was no question about the fact that plaintiff sustained some injuries, and the jury found damages of $5,000.00 for loss of earnings and future earning capacity and hospital and medical expenses in the amount of $3,295.20. Plaintiff claims that a new trial can be granted as to the damage issues only, while the findings on liability are left to stand.

2. Defendant's motion for judgment notwithstanding the verdict. The grounds of this motion are that: (a) it was conceded that plaintiff was not an employee of the Railroad at the time he was injured; (b) there is no legally competent evidence to support the jury finding that the Equipment Corporation was an alter ego of the Railroad, and (c) plaintiff waived any claim he might have had against the Railroad by successfully prosecuting his workmen's compensation claim on a theory entirely inconsistent with his claim in this case.

3. Defendant's alternative motion for judgment. This motion urges that:

(a) If there is sufficient evidence to show that Equipment Corporation was an alter ego of the Railroad, the effect of such finding would be that the two corporations were one and the same.

(b) If they are one and the same, the Railroad is entitled to credit or offset the amount of the settlement of the plaintiff's workmen's compensation claim against his recovery on the verdict.

(c) Since the largest amount ($8,295.20) the plaintiff could possibly recover on the verdict is less than the amount of the compensation settlement ($10,000.00 cash plus medical expenses), the offset would more than cover the amount of damages allowed by the jury.

The Court is of the opinion that the Railroad's motion for judgment notwithstanding the verdict should be granted on the ground that there is no evidence to support the finding of the jury that the Equipment Corporation was an alter ego of the Railroad. In the absence of a valid finding to such effect, there is no way the Railroad could possibly be liable to the plaintiff here. Also, the plaintiff is estopped to recover from the Railroad by having successfully asserted his claim for workmen's compensation from the Equipment Corporation's compensation insurance carrier.

At the conclusion of the evidence, the Railroad filed a motion for instructed verdict on the grounds, among others, (1) there was no evidence, and (2), certainly insufficient evidence, to justify the submission of the alter ego issue to the jury. Even though the Court was of the opinion that the Railroad's position was correct, it followed the recommended practice of withholding action on the motion for instructed verdict and submitting the case to the jury, so that a remand for a complete new trial would be unnecessary in the event the appellate court should disagree with the ruling on liability. Malone and Hogan Hospital Foundation v. Boston Insurance Company, 5 Cir., 378 F.2d 362 (1967);¹ Reitan v. Travelers Indemnity Co., 7 Cir., 267 F.2d 66 (1959).²

The Court has seriously reconsidered this question since the verdict was returned, and has reached the same conclusion that there was no evidence to establish that the Equipment Corporation was the alter ego of the Railroad at the time plaintiff was injured.

The stipulation previously mentioned established that plaintiff was working as an employee of the Equipment Corporation, and not the Railroad, at the time he was hurt. He was not under the direction, supervision or control of the Railroad. He was washing the inside of a railroad tank car with soap and water on the premises of the Equipment Corporation when he lost his footing due to lack of scaffolding and fell into the hopper of the car in such manner as to cause injuries to his back. There was no claim that the Railroad owned the car or that the work was being done for it.³ The car was in the shop of the Equipment Corporation for repair.

The evidence established as a matter of law that the Equipment Corporation was not the alter ego or an instrumentality of the Railroad at the time plaintiff sustained his injuries. There was no ownership, undue domination or control of either corporation by the other. Regular corporate procedure of each company was followed throughout. Neither one of them owned any stock in the other. No officers or directors of either corporation occupied any official position with the other. The management and operation of each company were in different hands. Most of the business of the Equipment Corporation was with companies other than the Railroad.⁴ The Equipment Corporation was not a common carrier by railroad under the FELA. It did not perform any transportation functions, switching operations or any other non-delegable duties of a railroad. It was strictly in the business of repairing and making major alterations on rolling stock of railroads from over the entire country. It carried workmen's compensation insurance on its employees. There was no use by the Railroad of the Equipment Corporation as a subterfuge or for the perpetration of a fraud.⁵

Under the circumstances, the Railroad was entitled to a judgment as a matter of law. Ruberiod Co. v. North Texas Concrete Co., 5 Cir., 193 F.2d 121 (1951); Fawcett v. Missouri Pacific R. Co., D.C.W.D.La., 242 F.Supp. 675, 678, affirmed, 5 Cir., 347 F.2d 233 (1965); Markow v. Alcock, 5 Cir., 356 F.2d 194 (1966); Garrett v. Southern Ry. Co., 6 Cir., 278 F.2d 424 (1960), cert. den., 364 U.S. 833, 81 S.Ct. 49, 5 L.Ed.2d 59; Steven v. Roscoe Turner Aeronautical Corp., 7 Cir., 324 F.2d 157 (1963); Whayne v. Transportation Management Service, Inc.,...