Bucyrus-Erie Co. v. Fogle Equipment Corp., BUCYRUS-ERIE

• Decision Date: 15 May 1986
• Docket Number: No. C14-85-395-CV,BUCYRUS-ERIE,C14-85-395-CV
• Citation: 712 S.W.2d 202
• Parties: CO., Appellant, v. FOGLE EQUIPMENT CORP., Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 202

712 S.W.2d 202

BUCYRUS-ERIE CO., Appellant, v. FOGLE EQUIPMENT CORP., Appellee.

No. C14-85-395-CV.

Court of Appeals of Texas,

Houston (14th Dist.).

May 15, 1986.

Rehearing Denied June 12, 1986.

Roger R. Wright, Jr. and Jo Ann Ray, Houston, for appellant.

Dan Ryan and John C. Marshall, Houston, for appellee.

Before JUNELL, DRAUGHN and ELLIS, JJ.

OPINION

DRAUGHN, Justice.

This appeal arises from a suit brought by Fogle Equipment Corporation, ("Fogle") against Bucyrus-Erie Company, ("Bucyrus") for property damages sustained as a result of the negligence of Eleodoro Veliz. Veliz is an employee of Fogle but at the time of the fire giving rise to this suit, Veliz was involved in modifying a Bucyrus crane under the supervision of a Bucyrus employee. The jury found that for purposes of the crane modification project, Veliz was the borrowed-servant of Bucyrus and awarded Fogle $151,800.59 in damages. In three points of error, Bucyrus contends that the trial court erred in overruling its motion for new trial because the evidence is insufficient to support the jury's finding that Veliz was the borrowed-servant of appellant on the occasion in question and that the trial court erroneously instructed the jury as to borrowed-servant status. We affirm.

In its first point of error, Bucyrus complains that the jury's conclusion that the negligent employee was a borrowed-servant is not supported by the evidence. Guided by familiar standards of review, we are required to affirm the judgment unless we conclude after considering all the evidence that the jury's finding is so against the great weight and preponderance of the evidence as to be manifestly unjust and wrong. Southwestern Bell Telephone Co. v. Baker, 650 S.W.2d 467, 469 (Tex.App.--Houston [14th Dist.] 1983, writ ref'd n.r.e.).

Appellee Fogle distributes cranes manufactured by appellant Bucyrus. The record shows that one of the models manufactured by Bucyrus required extensive modifications. These cranes had been distributed not only in Texas but across the country. Consequently, the project was not initiated by Fogle to conform to customer specifications but by Bucyrus in recognition that the cranes as distributed were unsatisfactory. Bucyrus' engineering department printed a checklist and accompanying blueprint for the necessary modification. The evidence also indicates that the closest Bucyrus plant to Fogle is located in Evansville, Indiana. Consequently, rather than returning the crane to Indiana, Fogle and Bucyrus entered into an agreement, also initiated by Bucyrus, to modify the crane on Fogle's property in Harris County using Fogle's personnel and equipment. Fogle supplied a welder, Eleodoro Veliz; and Bucyrus sent Dennis Orten, a service representative, to Fogle's premises to supervise the modification. The men worked together for a few days without incident. On Saturday, while both men were on break, a fire broke out causing extensive damage to the crane. It is not disputed that Veliz's negligence caused the fire that severely damaged the crane. It is disputed whether Veliz was an employee of the general employer, Fogle, or an employee of the special employer, Bucyrus, for the purpose of the modification work.

The borrowed-servant concept has been frequently applied by Texas courts. See, e.g., Sparger v. Worley Hospital, Inc., 547 S.W.2d 582, 583 (Tex.1977). Although the numerous appellate decisions are illuminating, the question of whether a general employee of one employer has become the special or borrowed-employee of another employer remains a difficult question. The critical consideration is which employer had the "right to control the details of the work." Dodd v. Twin City Fire Insurance Co., 545 S.W.2d 766, 768 (Tex.1977). Of course, where both employers are operating under a contract expressly assigning the right to control, a court can dispose of the borrowed-servant issue without the necessity of considering the facts and circumstances of the project. Producers Chemical Company v. McKay, 366 S.W.2d 220, 226 (Tex.1963); Sanchez v. Leggett, 489 S.W.2d 383, 387 (Tex.Civ.App.--Corpus Christi 1972, no writ).

Bucyrus contends that the distribution contract under which the crane was manufactured and sold to Fogle disposes of the "right to control" issue. Articles III and IV of the "Distributor Agreement" provides in pertinent part:

ARTICLE III. DISTRIBUTOR'S RIGHTS AND ACTIVITIES

* * *

B. Sales and Service

2) Distributor shall provide full, and complete SERVICE ... DISTRIBUTOR'S primary responsibility to provide SERVICE shall continue regardless of any general supervision of service problems by COMPANY, or any assistance in connection with SERVICE that may be rendered by COMPANY to Distributor ... (emphasis added);

* * *

ARTICLE IV. COMPANY'S RESPONSIBILITY

* * *

B. Assistance

COMPANY shall afford DISTRIBUTOR, ... the personal cooperation and assistance of the technical sales and service staffs of COMPANY ... (emphasis added).

Bucyrus asserts that under the above provision it agreed only to afford "cooperation and assistance" to Fogle and that Fogle had the right, and even the duty, to exercise control over its employees during equipment modifications. After carefully reviewing the distributor contract, however, we have concluded that it does not clearly and expressly address the right to control issue. Particularly here, where major, complex modifications are initiated by the manufacturer with unusual control vested in its representative, it is essential that the "right to control" responsibility be specifically spelled out in the contract before it may be said to be dispositive. Producers Chemicals, supra at 226. Therefore, we must now review the existing legal standards and apply them to the particular facts and circumstances of this modification project to determine if Bucyrus assumed control of Veliz's welding activities to such a degree that it became liable for his negligence.

In Producers Chemical, supra, the Supreme Court listed six factors as appropriate to consider in determining the...