Centeq Realty, Inc. v. Siegler

• Decision Date: 25 May 1995
• Docket Number: No. 94-0573,94-0573
• Citation: 38 Tex. Sup. Ct. J. 658,899 S.W.2d 195
• Parties: 38 Tex. Sup. Ct. J. 658 CENTEQ REALTY, INC., Petitioner, v. Karelyn SIEGLER, Respondent.
• Court: Texas Supreme Court

Page 195

899 S.W.2d 195

38 Tex. Sup. Ct. J. 658

CENTEQ REALTY, INC., Petitioner, v.Karelyn SIEGLER, Respondent.

No. 94-0573.

Supreme Court of Texas.

Argued Jan. 19, 1995.

Decided May 25, 1995.

Paul J. Dobrowski, Grant J. Harvey, Houston, for petitioner.

John M. O'Quinn, Jacqueline Lucci, Mark T. Croley, Andrew S. Pikoff, for respondent.

CORNYN, Justice, delivered the opinion of the Court, joined by PHILLIPS, Chief Justice, GONZALEZ, HIGHTOWER, HECHT, ENOCH, SPECTOR, and OWEN, Justices.

In this premises liability case, we consider whether Centeq Realty, Inc., (Centeq) owed Karelyn Siegler a duty of reasonable care to protect her from the criminal acts of a third party.The trial court granted Centeq's motion for summary judgment.The court of appeals reversed.874 S.W.2d 304.Because we determine that Centeq owed no legal duty to Siegler, we reverse the judgment of the court of appeals and render judgment that Siegler take nothing from Centeq.

Through a number of foreclosures, United Savings (United) came to own a majority of the units at the Warwick Towers, a high-rise condominium complex in Houston.United contracted with Centeq to market all of its units and assigned Centeq all voting rights associated with those units.Although Centeq was not itself an owner, the assignment of United's voting rights gave Centeq the right to vote on all major decisions affecting unit owners at the Warwick Towers, including the right to nominate and vote for the board members of the Warwick Council of Co-Owners (Warwick Council), the homeowners' association charged with maintaining the areas owned in common by the unit owners.Furthermore, by virtue of an agreement executed between United and the Warwick Council, United was entitled to have a representative on the board of the Warwick Council, a position that United filled with Carla Van Over, the president of Centeq and a resident of the Warwick Towers.

On January 25, 1990, Siegler, a Warwick Towers resident, was attacked and kidnapped from the parking garage of the Warwick Towers.She later filed suit against the Warwick Council and Centeq, alleging that they were negligent in failing to provide adequate security on the premises.According to Siegler's first amended petition, Centeq owed her a legal duty to provide adequate security because (1) Centeq "owned, controlled, and/or managed" the premises on which Siegler was injured, and because (2) Centeq was "an agent and/or representative of Warwick Towers and/or Warwick Counsel[sic] relative to the daily operation of the [Warwick Towers] premises."Centeq filed a motion for summary judgment, supported by the affidavit of Carla Van Over, who attested that (1) Centeq was not an agent or representative of Warwick Towers; (2) Centeq was not the agent of the Warwick Council, nor did it have a contractual relationship with the Warwick Council; (3) as a voting member of the Warwick Council, Van Over's obligations ran to the unit owners, not to Centeq; and (4) Centeq did not own, control, or manage the premises of the Warwick Towers.In response, Siegler filed the affidavit of Donna Green, the General Manager of the Warwick Council, who asserted, in pertinent part, that (1) Centeq was the agent of United, (2) Centeq controlled, by proxy, the majority of unit owner votes, which gave Centeq the power to select the board of the Warwick Council, change the bylaws of the Warwick Council, and to approve or deny all large expenditures; (3) because Centeq controlled the majority of votes, Centeq was able to select a majority of the board of the Warwick Council that voted in the best interest of Centeq; and (4) Centeq held itself out as the agent of the Warwick Towers, as evidenced by advertisements, phone listings, and the fact that Centeq maintained a sales and leasing office on the Warwick Towers premises.The trial court granted Centeq's motion for summary judgment and severed Siegler's claims against Centeq.¹A divided court of appeals reversed, holding that Siegler had raised a fact issue as to whether Centeq controlled the security at the Warwick Towers.

To obtain summary judgment, a movant must either negate at least one element of the plaintiff's theory of recovery, "Moore" Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 936(Tex.1972), or plead and conclusively establish each element of an affirmative defense.City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678(Tex.1979).Once the defendant produces sufficient evidence to establish the right to summary judgment, the plaintiff must present evidence sufficient to raise a fact issue."Moore" Burger, 492 S.W.2d at 936-37.Evidence favorable to the non-movant must be accepted as true and every reasonable inference indulged in the non-movant's favor.Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 549(Tex.1985).

The threshold inquiry in a negligence case is whether the defendant owes a legal duty to the plaintiff.Graff v. Beard, 858 S.W.2d 918, 919(Tex.1993);Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525(Tex.1990).The plaintiff must establish both the existence and the violation of a duty owed to the plaintiff by the defendant to establish liability in tort.Greater Houston Transp. Co., 801 S.W.2d at 525.The existence of duty is a question of law for the court to decide from the facts surrounding the occurrence in question.Id.

Generally, a person has no legal duty to protect another from the criminal acts of a third person.Greater Houston Transp. Co., 801 S.W.2d at 525;see alsoRESTATEMENT (SECOND) OF TORTS§ 315(1965)(noting that no general duty exists to control the conduct of others).There are, however, exceptions to this general rule.In the landlord-tenant relationship, for example, a landlord who retains control over the security and safety of the premises owes a duty to a tenant's employee to use ordinary care to protect the employee against an unreasonable and foreseeable risk of harm from the criminal acts of third parties.Exxon Corp. v. Tidwell, 867 S.W.2d 19, 23(Tex.1993);cf.Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 549(Tex.1985)(holding that apartment management had a duty to protect against foreseeable criminal activity);Haight v. Savoy Apartments, 814 S.W.2d 849, 853-54(Tex.App.--Houston [1st Dist.]1991, writ denied)(holding that apartment management had a duty to protect a tenant's guest).The right to control the premises is thus one of the factors that determines whether a legal duty should be imposed on the owner or possessor of the premises.

Siegler contends that there is a fact issue as to whether Centeq controlled the security of the parking garage at the Warwick Towers.Siegler's argument relies upon two premises: first, that the Warwick Council owed Siegler a duty to provide adequate security because it controlled the maintenance and security of the common areas, and, second, that Centeq, by holding a majority of the unit holder votes, controlled the actions of the Warwick Council, thus allowing it to control security at the Warwick Towers.

We have never decided whether the exception to nonliability articulated in Exxon applies with equal force to the relationship between a condominium homeowners' association and its unit holders.In Dutcher v. Owens, 647 S.W.2d 948, 950(Tex.1983), we implied but did not squarely hold that a homeowners' association owes a duty to its residents to use reasonable care in maintaining the safety of common areas.The sole issue before us in Dutcher was the allocation of liability, not the existence of liability.Id. at 948.We note, though, that courts in other jurisdictions have imposed upon a homeowners' association the duty to exercise due care for the residents' safety in those areas under its control.SeeFrances T. v. Village Green Owners Ass'n., 42 Cal.3d 490, 229 Cal.Rptr. 456, 459-60, 723 P.2d 573, 576-77(1986)(comparing the role of a homeowners' association to a landlord and holding that a homeowners' association owes a duty to provide reasonable security in common areas);see alsoNewell v. Best Sec. Syst., Inc., 560 So.2d 395, 397(Fl.Dist.Ct.App.1990).But see, Moody v. Cawdrey & Assoc., Inc., 68 Haw. 527, 721 P.2d 707(1986), rev'g6 Haw.App. 355, 721 P.2d 708(1986).See generally, Eric Hollowell, Annotation, Condominium Association's Liability to Unit Owner for Injuries Caused by Third Person's Criminal Conduct, 59 A.L.R. 4th 489(1988).

In this case, Siegler presented evidence that the Warwick Council controlled the security of the common areas, including the parking garage.Assuming without deciding that the Warwick Council owed a duty to its residents to provide adequate security in the parking garage, we turn to the second component of Siegler's cause of action against Centeq: whether Centeq's power to cast United's votes gave it the power to control the board of the Warwick Council and thereby control security at the Warwick Towers.

We have previously noted the similarities between homeowners' associations and corporations, leading us to conclude that a homeowners' association is a separate legal entity from its unit owners, just as a corporation is distinct from its shareholders.Dutcher, 647 S.W.2d at 950(citingWhite v. Cox, 17 Cal.App.3d 824, 95 Cal.Rptr. 259(1971)).In the corporate context, we will disregard the corporate fiction under the "alter ego" theory when the corporation is "organized and operated as a mere tool or business conduit of another corporation."Castleberry v. Branscum, 721 S.W.2d 270, 272(Tex.1986).Applying the alter ego theory by analogy to the case at hand, Siegler's legal argument, in effect, asks us to disregard the separate legal existence of the Warwick Council and to view it as a mere conduit through which Centeq exercised power over all security decisions.Based on this record, we decline to do so.

Siegler submitted uncontested summary judgment proof that the proxy agreement...