Carroll v. Timmers Chevrolet, Inc.

• Decision Date: 19 December 1979
• Docket Number: No. B-8467,B-8467
• Citation: 592 S.W.2d 922
• Parties: Orel CARROLL, Petitioner, v. TIMMERS CHEVROLET, INC. and Harvey E. Lively, Respondents.
• Court: Texas Supreme Court

Page 922

592 S.W.2d 922

Orel CARROLL, Petitioner, v. TIMMERS CHEVROLET, INC. and Harvey E. Lively, Respondents.

No. B-8467.

Supreme Court of Texas.

Dec. 19, 1979.

Rehearing Denied Jan. 30, 1980.

Talbert, Giessel & Stone, Alice Giessel and Henry P. Giessel, Houston, Leo Freedman, Pasadena, for petitioner.

Patten, Gustafson & Hyatt, J. W. Patten, Hicks, Hirsch, Glover & Robinson, Iris Hefter Robinson and James Scott, Houston, for respondents.

McGEE, Justice.

This suit arose as a result of personal injuries suffered by Orel Carroll when the automobile he was driving was in a collision with a wrecker truck. Defendant John Morris Crum was driving the wrecker at the time of the collision. Crum's employer was defendant Jerry McCoy who had leased the wrecker from defendant Harvey E. Lively. The fourth defendant was Timmers Chevrolet, Inc. The trial court entered judgment against the four defendants jointly and severally. Lively and Timmers Chevrolet appealed, and the judgment was reversed and rendered in their favor. 582 S.W.2d 473. We reverse the judgment of the court of civil appeals as to Lively, but affirm as to Timmers Chevrolet.

The collision occurred in 1976 in Pasadena, Texas, while the wrecker was responding to a nonemergency request for towing. The wrecker was owned by Lively, who had been issued an emergency wrecker permit by the City of Pasadena. Lively had applied for the permit pursuant to a Pasadena ordinance that regulated the wrecker business by making it unlawful to operate wreckers upon the city streets without a permit. ¹ Any "owner," as defined by the ordinance, was required to complete a yearly permit application. ² Application forms Prior to 1975, Harvey's Wrecker Service was operated as a sole proprietorship by Lively. Beginning in 1975, Lively leased the wrecker service, including his wreckers and permits, on a monthly basis to McCoy. McCoy had no permit for the wrecker, and neither the 1976 renewal application made by Lively nor the permit indicated that it was McCoy who was currently engaged in the wrecker service business. Carroll's theory of recovery was based in part on an alleged conspiracy between Lively and McCoy to unlawfully evade the permit ordinance.

were provided by the city. The emergency wrecker permit forms required disclosure of such things as size and equipment of the wrecker. The identity of the "true owner," if not the applicant, was required to be disclosed, as well as the name of the company under which the wrecker was to be operated. Once issued a permit, the holder's ability to transfer it was restricted.

During the time Lively had operated Harvey's Wrecker Service, he had established a business arrangement with Timmers Chevrolet, which was in the business of selling and repairing automobiles. Lively and Timmers Chevrolet had agreed that when Timmers Chevrolet received a call from someone whose vehicle needed to be towed, it would forward the call through a general dispatch service to Harvey's Wrecker Service. If one of their wreckers was available, Harvey's Wrecker Service would pick up the vehicle; if not, Timmers Chevrolet could use other wrecker services. Timmers Chevrolet advertised by having its name painted on the front and sides of the wreckers. Upon "loading a wreck," Harvey's Wrecker Service would deliver it to Timmers' service department unless directed otherwise by the customer. This arrangement continued after McCoy took over the wrecker service. Carroll predicated liability against Timmers Chevrolet on the ground that it also sought to evade the permit requirements.

Although about half the cars picked up by Harvey's Wrecker Service went to Timmers, the wrecker service also received calls from other automobile-related businesses and individuals. At the time of the collision, its wrecker had been directed to pick up a vehicle after a nonemergency request from an individual. This individual had been referred to Harvey's Wrecker Service by a local Datsun dealership, and wished to have his automobile towed to his home.

In response to special issues the jury found that Carroll was 15 percent negligent, and that Crum, the driver, was 85 percent negligent. It also found that McCoy, Lively, and Timmers Chevrolet "were engaged in a civil conspiracy, at the time of the collision in question, to evade the auto wrecker permit laws of the City of Pasadena." Additionally, Timmers Chevrolet was found to be an "owner" of the wrecker within the meaning of the ordinance. The jury failed to find, however, that the driver was in furtherance of a mission for Timmers Chevrolet or was subject to Timmers' right to control. Judgment was entered against all defendants, jointly and severally, for $692,750.

A civil conspiracy is generally defined as a combination of two or more persons to accomplish an unlawful purpose, or to accomplish a lawful purpose by unlawful means. It is not the agreement itself, but an injury to the plaintiff resulting from an act done pursuant to the common purpose that gives rise to the cause of action. Great National Life Ins. Co. v. Chapa, 377 S.W.2d 632, 635 (Tex.1964).

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 In this case the wrecker driver has been found negligent; plaintiff bases liability against the appealing parties, Lively and Timmers Chevrolet, on allegations that each conspired to evade the Pasadena wrecker permit ordinance. The jury having found that McCoy, Lively, and Timmers were engaged in such a conspiracy, we must view the evidence in the light most favorable to the jury finding. We also recognize that the common purpose from which conspiracy liability arises may be established by reasonable inferences. Quoting early cases, this court stated:

assisted, or encouraged his acts." W. PROSSER, HANDBOOK OF THE LAW OF TORTS § 46, at 293 (1971). Once a conspiracy is proven, each co-conspirator "is responsible for all acts done by any of the conspirators in furtherance of the unlawful combination." State v. Standard Oil Co., 130 Tex. 313, 107 S.W.2d 550, 559 (1937).

"It was early said by this Court in Jernigan v. Wainer, 12 Tex. 189:

" 'When men enter into conspiracies, they are not likely to call in a witness . . . . In such cases the injured party must necessarily have recourse to circumstantial evidence. For it is only by the inferences and deductions which men properly and naturally draw from the acts of others in such cases, that their intentions can be ascertained. They are not likely to proclaim them in the hearing of witnesses.'

"And in Whitmore v. Allen, 33 Tex. 355, that

" 'A conspiracy may be proven as well by the acts of the conspirators, as by anything they may say, touching what they intended to do.' "

International Bankers Life Ins. Co. v. Holloway, 368 S.W.2d 567, 581-82 (Tex.1963). The evidence shows the existence of two agreements: a lease from Lively to McCoy, and a business agreement between Timmers Chevrolet and Lively. We will consider whether conspiracy liability can be imposed upon Lively or Timmers Chevrolet on the basis of either of these agreements.

LIABILITY OF HARVEY E. LIVELY

Although the leasing agreement from Lively to McCoy was effective in 1975, Lively applied for and was issued the 1976 renewal permit for the wrecker involved in the collision. No indication was given on the application that the wrecker business had been turned over to McCoy.

The language of the Pasadena ordinance and the information requested on the application forms reveal that some permit requirements were directed toward the personal attributes of the applicant. The initial application form submitted by Lively for the wrecker inquired about his financial responsibility and moral character. Additionally, each applicant was required to file an insurance policy. A wrecker licensing board was authorized to examine the application and insurance policy to ensure compliance with the ordinance. The ordinance also authorized a hearing to determine whether the "public convenience and necessity" required issuance of a permit. Transfer of permits was prohibited unless the board was notified and a copy of the transfer agreement submitted for approval.

Lively testified that he knew transfer of the permits was illegal. When asked why he had entered into a lease agreement rather than a sale to McCoy, Lively answered that wrecker permits could not be transferred. McCoy was to own the wreckers at the end of the lease; the lease was "so he could apply for permits later on." Beginning in 1975 Lively applied for renewal permits in the name of "Harvey's Wrecker Service" rather than in his own name as had been his practice before the lease. This evidence tends to establish that the immediate purpose of the leasing agreement between Lively and McCoy was to avoid provisions of the permit ordinance. Lively retained title to the wreckers; McCoy, by not making a permit application as "owner," was able to avoid disclosures and obligations to which he might otherwise have been subjected.

The civil conspiracy theory of liability among defendants was argued by the plaintiffs in Berry v. Golden Light Coffee Co. In Berry v. Golden Light Coffee Company, a second principle was suggested as a basis for holding the coffee company liable: "(O)ne holding a certificate or permit authorizing him to operate a motor carrier over the highways of the State may not delegate to another the rights conferred by such certificate or permit and then release himself from liability to those injured by the negligence of the wrongfully delegated party." Id. at 439. The public policy favoring liability in such cases was expressed in Emerson v....