Beneficial Personnel Services of Texas, Inc. v. Porras

Decision Date27 June 1996
Docket NumberNo. 08-94-00169-CV,08-94-00169-CV
Citation927 S.W.2d 177
PartiesBENEFICIAL PERSONNEL SERVICES OF TEXAS, INC., and Business Staffing, Inc., Appellants, v. Noel PORRAS, Appellee.
CourtTexas Court of Appeals

Rick G. Strange, Cotton, Bledsoe, Tighe & Dawson, Midland, for appellant.

Robert Trenchard, Jr., Trenchard & Buckingham, Kermit, for appellee.

Before BARAJAS, C.J., and LARSEN and McCLURE, JJ.


LARSEN, Justice.

This appeal stems from on-the-job injuries sustained by Noel Porras while working for Beneficial Personnel Services of Texas, Inc. ("BPS"). A jury found BPS had committed fraud, had breached its employment contract with Porras, and was negligent. It assessed $42,128 in actual and $150,000 in exemplary damages. After verdict, Porras filed a trial amendment adding Business Staffing, Inc. as an additional defendant. The trial court granted the trial amendment, and rendered judgment against both BPS and BSI. Defendants appeal.


Noel Porras is an oil field worker in Ward County, Texas. Before 1991, he was employed by White Well Service as a well service floorhand. Mr. Porras is a high school graduate and, before his industrial accident, was a baseball pitcher of some talent. He is married to Carmen Porras and they have two small children.

In 1991, Beneficial Personnel Services of Texas, Inc., an employee leasing company, approached White Well Service's owner Johnny White. BPS proposed that White Well fire all its employees, who would be immediately hired by BPS and leased back to White Well to perform exactly the same work. As part of the agreement, BPS provided administrative services for personnel. These services were to include benefits for injuries compensable under the Texas Workers' Compensation Act, but not through the state-sanctioned compensation system. That is, although BPS obligated itself to provide benefits, it would not purchase insurance from subscribers to the Texas Workers' Compensation Act. White Well agreed to this arrangement and fired all its employees, including Noel Porras. The employees were immediately hired by BPS, and leased back to White Well to perform the same work.

When his employment was changed from White Well to BPS, Noel Porras signed an agreement which provided:

3. WORKER'S COMPENSATION BENEFITS. BPS has agreed in the PERSONNEL LEASE AGREEMENT with its Client Company to provide worker's compensation benefits provided by a non-admitted insurance carrier to EMPLOYEE for injuries compensable under the Texas Worker's Compensation Act and similar acts of other jurisdictions (collectively referred to as the 'Act') while EMPLOYEE is assigned to CLIENT COMPANY and to waive (give up) their common law defensed [sic] against the EMPLOYEE as set forth in the corresponding Act. In exchange, the EMPLOYEE agrees to limit his/her recovery against BPS and CLIENT COMPANY for such compensable injuries to benefits allowed by the corresponding Act. These benefits are provided by a non-admitted insurance carrier.

Because our worker's comp. benefits are provided by a non-admitted carrier the New 'Act' requires that BPS provide you with the following statement:

"BPS DOES NOT have worker's compensation insurance coverage to protect you from damages because of work-related illness or injury."

On May 13, 1992, while servicing an oil rig, a stuffing box fell on Porras's left hand. The blow severed the tip of his left index finger almost completely. He was taken to Ward Memorial Hospital, where he was seen in the emergency room by Dr. Adolfo Rama. After examining Porras and taking x-rays, Dr. Rama amputated the fingertip. On June 2, 1992, Dr. Rama released Porras to return to light duty in two weeks, as of June 15. Porras continued to have swelling and pain, however, and called BPS requesting to see an orthopedic specialist, Dr. O.T. Garza, who had successfully treated Porras's father-in-law for a knee injury. BPS's representative refused to authorize the treatment, telling Porras, "Well, if you don't go to light duty, I'm sorry, but I'm not a doctor and you're on your own...." After that date, BPS paid Porras nothing for medical treatment, nothing for temporary income benefits, and nothing for impairment income benefits. Although Dr. Rama's release for light duty contemplated a return to work on June 15, BPS fired Porras as of June 10, allegedly for refusing to return for light duty. BPS never explained this anticipatory termination, nor did it tell Porras he was terminated. During his recuperation, BPS sent Porras $920 for four weeks wage replacement, approximately one-half of his average weekly wage of $460.

In August 1992, Porras went to see Dr. Garza, who found he still had swelling at the amputation and prescribed physical therapy. Dr. Garza did not release Porras to return to work until October 1992. Porras contacted White Well, only to be told he had been fired in June.

Porras's injury resulted in an 8 percent impairment to his whole body, according to the AMA guidelines used by the Texas Workers' Compensation Commission to establish disability ratings. BPS paid him nothing for his disability, however, until after he had filed this lawsuit, and even then paid him only 50 percent of his average weekly wage, instead of the 70 percent he would have received under the Act.

Porras filed suit against a number of entities; all but BPS either settled or were severed from this suit before trial. The unanimous jury made the following findings:

1. The negligence of BPS's employees other than Porras proximately caused his injury of May 13, 1992.

2. Reasonable compensation for Porras's injuries would include $5,000 for physical pain and mental anguish; $19,380 for loss of earnings and earning capacity; $8,832 for disfigurement; and $2,916 for medical care.

3. BPS agreed to provide Porras with the same amount and types of benefits he would have received under Texas workers' compensation law, and BPS did not comply with that agreement.

4. Porras agreed to limit his ability to change doctors in non-emergency situations, and to limit his recovery to those benefits he could obtain under the Texas Workers' Compensation Act.

5. BPS committed fraud against Porras concerning the existence and type of workers' compensation benefits it would provide.

6. Porras's fraud damages would include $1,500 for damage to credit reputation in the past; $1,500 for damage to credit reputation in the future; $1,500 for mental anguish in the past; and $1,500 for mental anguish in the future.

7. Exemplary damages for BPS's fraud should be assessed at $150,000.

The trial court entered judgment on the tort causes of action, and made the following finding on the contract between BPS and Porras:

The Court further finds that Defendant Beneficial Personnel Services of Texas, Inc. was not a subscriber to the Workers Compensation Act of the state of Texas. The Court further finds that the contractual attempt of said Defendant to limit its liability resulting from an injury sustained by an employee in the course and scope of employment to those benefits provided by the Texas Workers Compensation Act is void under the laws and statutes of the state and further void as against public policy.

The trial court also granted a trial amendment finding that BPS had changed its name to "Business Staffing, Inc." and finding that BPS and BSI were one and the same corporation, and included that finding in the judgment. BPS and BSI appeal, urging twenty points of error. We affirm.

Name Change

In Point of Error One, appellants claim that the trial court erred in rendering judgment against BSI, a non-party. 1 BSI was not named as a defendant prior to trial, but BPS's corporate representative, Kenneth Cobb, called as an adverse witness by plaintiff, testified:

Q: And your occupation?

A: I'm Director of Risk Management.

Q: And is that for BPS of Texas, Inc.?

A: Yes, sir, BSI.

Q: Okay, and what's BSI?

A: Business Staffing, Incorporated.

Q: Is that Oklahoma?

A: No, sir, that's our new--we've changed names. We got out of BPS of Texas. We've gone into BSI.

. . . . .

Q: Mr. Cobb, are you appearing here today as the corporate representative of Beneficial Personnel Services of Texas, Inc.?

A: Yes, sir.

Q: Is that still the name--have you changed the name of the business?

A: Yes, sir, we went to BSI because BPS of Texas limited us by the name itself to Texas.

Q: The same company?

A: Yes, sir.

Q: Just a different name?

A: Yes, sir.

Defense counsel made no objection to this evidence volunteered by his corporate representative, and indeed used the names "BPS" and "BSI" interchangeably throughout trial. Based on this testimony, Porras requested a trial amendment to include BSI as a defendant, urging that the two entities were one and the same. The trial court agreed, and entered judgment which included the following paragraph:

The Court further finds that Defendant has changed its name to Business Staffing, Inc. and that the said Business Staffing, Inc. is the same corporation as Defendant herein.

Defense counsel belatedly objected to the trial amendment and filed a motion to modify the judgment to delete Business Staffing, Inc. 2

It is true that generally, judgment shall not be rendered against one who is neither named nor served as a party defendant. TEX.R.CIV.P. 124; Werner v. Colwell, 909 S.W.2d 866, 869 (Tex.1995). One exception to this rule is when a party waives service by making a general appearance before the court. Id. at 869-70. We believe that this case presents another exception: where there is clear, uncontroverted, unequivocal and unsolicited testimony by a corporate representative that the two entities are one and the same, where defense counsel makes no objection to that testimony, and even refers to the defendant by both names interchangeably throughout trial. We also find it significant that the corporate representative volunteered the name change information,...

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