Fifth Club, Inc. v. Ramirez

• Decision Date: 30 June 2006
• Docket Number: No. 04-0550.,04-0550.
• Parties: FIFTH CLUB, INC. and David A. West, Petitioners, v. Roberto RAMIREZ, Respondent.
• Court: Texas Supreme Court

Page 788

196 S.W.3d 788

FIFTH CLUB, INC. and David A. West, Petitioners, v. Roberto RAMIREZ, Respondent.

No. 04-0550.

Supreme Court of Texas.

Argued October 18, 2005.

Decided June 30, 2006.

COPYRIGHT MATERIAL OMITTED

Timothy Poteet, David E. Chamberlain, Amy Catherine Welborn, Chamberlain & McHaney, Austin, for petitioner.

Carlos Ramon Soltero, Scott Steven Cooley, Brian Scott Engel, Stephanie E. Kaiser, McGinnis Lochridge & Kilgore, L.L.P., Austin, for respondent.

Justice GREEN delivered the opinion of the Court, in which Chief Justice JEFFERSON, Justice O'NEILL, Justice BRISTER, and Justice MEDINA joined, and in which Justice HECHT, Justice WAINWRIGHT, Justice JOHNSON, and Justice WILLETT joined as to Parts I, II, and III.

In this case we revisit the rule that an employer is generally not liable for the acts of an independent contractor unless the employer exercises sufficient control over the details of the independent contractor's work. See Lee Lewis Constr., Inc. v. Harrison, 70 S.W.3d 778, 783 (Tex. 2001). We do so to consider whether a "personal character exception" makes a business owner's duties to the public nondelegable when contracting for private security services to protect its property. Because we do not recognize a personal character exception to the rule that an owner is not liable for the tortious acts of independent contractors, and because the evidence in this case is legally insufficient to support the jury's negligence, malice, and exemplary damages findings against the owner, we reverse and render judgment in the owner's favor.

We do find legally sufficient evidence to support the future mental anguish damages award against the independent contractor and affirm the judgment as to the contractor.

I. Facts and Procedural History

Fifth Club, Inc. operates an Austin nightclub known as Club Rodeo. David West, a certified peace officer, was hired as an independent contractor by Fifth Club to provide security at the nightclub.¹ Late one night, Roberto Ramirez arrived at Club Rodeo after several hours of drinking. Ramirez and his brother tried to enter the club but were denied admission by the doorman, allegedly because they were intoxicated. The doorman, an employee of Fifth Club, signaled to West and another parking lot security officer to escort Ramirez and his brother out of the club's entrance. West allegedly grabbed Ramirez, slammed Ramirez's head against a concrete wall, knocking him unconscious, and then struck him several times. The altercation resulted in multiple injuries to Ramirez, including a fractured skull. West moved Ramirez to the parking lot and placed him in handcuffs. The police arrived and arrested Ramirez, but a grand jury later declined to indict Ramirez on the charge of assaulting a police officer. Ramirez sued West and the club for damages.

Ramirez claims Fifth Club is vicariously liable for West's conduct in spite of his independent contractor status because it controlled West's security activities. Ramirez further claims that Fifth Club assumed a personal and nondelegable duty by contracting for security services to protect its property. Under Ramirez's theory, the personal character of this duty, of hiring security personnel to protect business invitees and the premises, allows an employer to be liable for intentional acts of its independent contractor.

A jury found Fifth Club vicariously liable for West's conduct and for negligence and malice in its hiring of West. The jury awarded Ramirez actual damages that included future mental anguish damages and exemplary damages. The court of appeals affirmed.² 144 S.W.3d 574, 592 (Tex. App.—Austin 2004, pet. granted).

Fifth Club contends there is legally insufficient evidence it retained sufficient control over West's security activities to make it vicariously liable for his conduct. It also argues there is no personal character exception to the rule that insulates employers from the tortious acts of independent contractors. Fifth Club further asserts there is legally insufficient evidence to support the finding of malice in its hiring of West. And finally, both Fifth Club and West claim there is legally insufficient evidence to support the award of future mental anguish damages. We address each argument in turn.

II. Fifth Club's Liability for West's Conduct

A. Control

Generally, an employer has no duty to ensure that an independent contractor performs its work in a safe manner. See Lee Lewis Constr., Inc., 70 S.W.3d at 783. However, an employer can be held vicariously liable for the actions of an independent contractor if the employer retains some control over the manner in which the contractor performs the work that causes the damage. See id. In Redinger v. Living, Inc., we explained that

[o]ne who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care.

689 S.W.2d 415, 418 (Tex.1985) (quoting RESTATEMENT (SECOND) OF TORTS § 414 (1977)). We held the general contractor liable for the actions of the independent contractor in Redinger because the general contractor retained "the power to direct the order in which the work was to be done and to forbid the work being done in a dangerous manner." Id.; see Coastal Marine Serv. of Tex., Inc. v. Lawrence, 988 S.W.2d 223, 226 (Tex.1999) ("The supervisory control must relate to the activity that actually caused the injury, and grant the owner at least the power to direct the order in which work is to be done or the power to forbid it being done in an unsafe manner."). We further explained in Koch Refining Co. v. Chapa that a right of control requires more than

a general right to order the work stopped or resumed, to inspect its progress or to receive reports, to make suggestions or recommendations which need not necessarily be followed, or to prescribe alterations and deviations. Such a general right is usually reserved to employers, but it does not mean that the contractor is controlled as to his methods of work, or as to operative detail. There must be such a retention of a right of supervision that the contractor is not entirely free to do the work in his own way.

11 S.W.3d 153, 155 (Tex.1999) (quoting RESTATEMENT (SECOND) OF TORTS § 414 cmt. c (1965)). Employers can direct when and where an independent contractor does the work and can request information and reports about the work, but an employer may become liable for the independent contractor's tortious acts only if the employer controls the details or methods of the independent contractor's work to such an extent that the contractor cannot perform the work as it chooses. Id. at 155-56.

In this case, there was no evidence that Fifth Club gave more than general directions to West or that it retained the right to control the manner in which West performed his job. Fifth Club's action in directing West to remove Ramirez from the premises did not rise to the level of directing how the work was to be performed or directing the safety of the performance because West retained the right to remove Ramirez by whatever method he chose. Fifth Club, therefore, cannot be held vicariously liable for West's conduct.

B. Personal Character Exception

Ramirez argues that even if Fifth Club did not retain control over West's actions, it can still be held vicariously liable because of a personal character exception to the general rule against liability of employers for the acts of independent contractors. According to Ramirez, the duty arising from an employer's hiring of security personnel is personal in character, special only because of the nature of security work, and therefore an employer should be held liable for the tortious acts of the independent-contractor security personnel.

We have never addressed this "personal character exception," which first appeared in Texas in 1976. See Dupree v. Piggly Wiggly Shop. Rite Foods, Inc., 542 S.W.2d 882, 888-90 (Tex.Civ.App.—Corpus Christi 1976, writ ref'd n.r.e.). Since then, the exception has been mentioned in only three other opinions from Texas courts of appeals. See Duran v. Furr's Supermarkets, Inc., 921 S.W.2d 778, 787-88 (Tex. App.—El Paso 1996, writ denied); Ross v. Tex. One P'ship, 796 S.W.2d 206, 213 (Tex. App.—Dallas 1990), writ denied, 806 S.W.2d 222 (Tex.1991); Westhill Mgmt., Inc. v. Hefner, No. 01-87-000617-CV, 1988 WL 46399, at *3 (Tex.App.—Houston [1st Dist.] May 12, 1988, writ denied)(not designated for publication). Under the exception, a premises owner can be held liable when an independent contractor's work involves duties that are personal in character. See Duran, 921 S.W.2d at 789; Ross, 796 S.W.2d at 212-13. Texas courts have discussed the exception only in regards to security work performed by an independent contractor. See Duran, 921 S.W.2d at 787-88; Ross, 796 S.W.2d at 213; Westhill Mgmt., Inc., 1988 WL 46399, at *3.

In Dupree, the Thirteenth Court of Appeals held that a supermarket could be vicariously liable for the work of its independent-contractor security guards:

[B]ecause of the "personal character" of duties owed to the public by one adopting measures to protect his property, owners and operators of enterprises cannot, by securing special personnel through an independent contractor for the purposes of protecting property, obtain immunity from liability for at least the intentional torts of the protecting agency or its employees.

542 S.W.2d at 888. The court cited opinions from other states in support of its holding. Id. (citing Adams v. F.W. Woolworth Co., 144 Misc. 27, 257 N.Y.S. 776, 781 (N.Y.Sup.Ct.1932); Hendricks v. Leslie Fay, Inc., 273 N.C. 59, 159 S.E.2d 362, 366-68 (1968); Szymanski v. Great Atl. & Pac. Tea Co., 79 Ohio App. 407, 74 N.E.2d 205, 206-07 (1947)). The court further held that when...