Karl and Kelly Co., Inc. v. McLerran
| Decision Date | 16 February 1983 |
| Docket Number | No. C-1608,C-1608 |
| Citation | 646 S.W.2d 174 |
| Parties | KARL AND KELLY COMPANY, INC., et al., Petitioners, v. Clifford McLERRAN, et ux. Respondents. |
| Court | Texas Supreme Court |
William Andress, Dallas, for petitioners.
Wesley G. Stewart, Jr., The Firm of Larry Parnass, Michael J. Wiss, Irving, for respondents.
This is a suit brought under the Texas Deceptive Trade Practices Act by Clifford and Juanita McLerran because of alleged defects in a new house purchased from builder-vendor Karl and Kelly Company, Inc. The trial court rendered a judgment for the McLerrans against the corporation and its officers in their individual capacities. The court of appeals affirmed in an unpublished opinion. Tex.R.Civ.P. 452. We reverse the judgments of the courts below without oral argument and remand for new trial. Tex.R.Civ.P. 483.
The McLerrans contracted with Karl and Kelly Company, Inc., for the construction of a house. After construction was completed, they became aware of several defects and filed suit against Karl and Kelly Company, Inc., Karl Simon, and James Kelly. Simon, an architect, and Kelly, a real estate agent, operated Karl and Kelly Company, serving as officers of the corporation. Simon and Kelly, as individuals, and Karl and Kelly Company, Inc. filed an answer and the case was set for trial. Thereafter, the attorney for all three defendants withdrew from the case. A successor attorney and the original attorney failed to communicate on the trial date, and when the case was called to trial nobody appeared for any of the defendants. After a trial to the court, judgment was rendered for the McLerrans.
The only question presented is whether the trial court erred in holding Simon and Kelly individually liable. Simon and Kelly contend that they cannot be held individually liable because the plaintiffs did not plead or prove the issue of alter ego.
Since the defendants had answered but failed to appear for trial, the judgment in this case was a post-answer "default" judgment. Therefore, judgment could not be entered on the pleadings and the plaintiffs were required to offer evidence and prove all aspects their case. See Stoner v. Thompson, 578 S.W.2d 679 (Tex.1979); Mullen v. Roberts, 423 S.W.2d 576 (Tex.1968). As plaintiffs, the McLerrans had the burden of establishing individual liability. Torregrossa v. Szelc, 603 S.W.2d 803 (Tex.1980). The only evidence that was presented during the short trial was that the McLerrans had contracted with the corporation and that Simon and Kelly had made representations about the workmanlike manner in which the house would be constructed. There was no direct evidence of a sham corporate structure or of a failure to follow corporate formalities and no evidence that Simon and Kelly had acted in their individual capacities.
The court of appeals reasoned that there "was some evidence of representations made by both Simon and Kelly." It is true that the Statement of Facts reflects both Simon and Kelly made representations. However, since the contract was with the corporation and not with Simon and Kelly, any representations made by Simon and Kelly were made as agents of the corporation. We hold there is no evidence in the record before us that Karl and Kelly Company was the alter ego of either Simon or Kelly. The courts below erred in rendering a personal judgment...
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...so a party may amend his pleadings, offer additional evidence, and retry the case on a different theory. Karl & Kelly Co. v. McLerran, 646 S.W.2d 174 (Tex.1983) (per curiam); Morrow v. Shotwell, 477 S.W.2d 538 (Tex.1972); Houston Fire & Casualty Insurance Co. v. Nichols, 435 S.W.2d 140 (Tex......
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...or committed a separate tort himself. For instance, in the Texas Deceptive Trade Practices Act case of Karl and Kelly Company, Inc. v. McLerran, 646 S.W.2d 174, 175 (Tex.1983), the dispute grew out of a contract with a corporation to which the individual agents were not parties. Therefore, ......
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Henry S. Miller Co. v. Bynum
...transmits on behalf of the principal, it seems to be in conflict with other opinions of the supreme court: Karl and Kelly Co. v. McLerran, 646 S.W.2d 174, 175 (Tex.1983) (the agent-owners of the corporation were not individually liable because the plaintiffs did not plead and prove alter eg......
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...the employee is not liable for the breach of that duty because the employee is not a party to the contract. See Karl & Kelly Co. v. McLerran, 646 S.W.2d 174, 175 (Tex.1983). For an employee to be held liable, a breach of the duty to the employer is not enough; there must also be a separate ......
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Appendix - Desk Book
...possible defendants is limited only by the exemptions provided in Section 17.49.” Id. at 706. Karl and Kelly Company, Inc. v. McLerran, 646 S.W.2d 174 (Tex. 1983) ( per curiam ). The plaintiffs, home buyers, brought suit against the corporate builder of a home and the indi vidual owners of ......