Leitch v. Hornsby

• Decision Date: 13 December 1996
• Docket Number: No. 94-1323,94-1323
• Citation: 935 S.W.2d 114
• Parties: 40 Tex. Sup. Ct. J. 159 Russell LEITCH, Hal Crews, and Pro Com Marketing Services, Inc., Petitioners, v. Grady HORNSBY, Respondent.
• Court: Texas Supreme Court

Page 114

935 S.W.2d 114

40 Tex. Sup. Ct. J. 159

Russell LEITCH, Hal Crews, and Pro Com Marketing Services Inc., Petitioners, v. Grady HORNSBY, Respondent.

No. 94-1323.

Supreme Court of Texas.

Argued Sept. 5, 1996.

Decided Dec. 13, 1996.

Charles M. Jefferson, San Antonio, for Petitioners.

Charles A. Nicholson, San Antonio, for Respondent.

BAKER, Justice, delivered the opinion of the Court, in which PHILLIPS, Chief Justice, and GONZALEZ, HECHT, CORNYN, ENOCH and OWEN, Justices, join.

Grady Hornsby sued his employer, Pro Com Marketing Services, Inc., for damages for back injuries Hornsby suffered when he lifted a cable reel. Hornsby also joined Russell Leitch and Hal Crews, officers, directors, and stockholders of Pro Com as defendants. The trial court rendered judgment on a jury verdict against Pro Com, Leitch, and Crews, jointly and severally for almost $700,000. The court of appeals affirmed the trial court's judgment. 885 S.W.2d 243.

This appeal raises the issue of the corporate officers' personal liability and whether there is some evidence of negligence and causation for Hornsby's injury. We conclude the court of appeals erred in affirming the trial court's judgment holding Leitch and Crews individually liable. We also conclude that Hornsby produced no probative evidence to prove causation between his back injury and Pro Com's alleged negligence. Accordingly, we reverse the court of appeals' judgment and render judgment that Grady Hornsby take nothing from Pro Com Marketing Services, Inc., Russell Leitch, and Hal Crews.

I. BACKGROUND

A. FACTS

Pro Com is a cable television servicing company. In 1989, Pro Com began installing cable wire for households to which it had sold cable services. When it began installation of cable wire, Pro Com hired Grady Hornsby to be its technical manager. As technical manager, Pro Com placed Hornsby in charge of cable installation, including the training and supervision of other Pro Com employees. While preparing to go to a job site for a Pro Com contract, Hornsby began unloading equipment from his truck including a reel of cable. Hornsby did not wear a lift belt, nor did he have a dolly available to unload the cable reel. The reel weighed about 65 pounds. When he lifted the reel he injured his back.

Before working for Pro Com, Hornsby had worked for eight to ten different cable companies. None of these companies had provided lifting belts for its employees. Hornsby testified some of his previous employers had provided their workers with safety belts but not lifting belts. Some of the companies had supplied dollies for their employees. Hornsby requested Pro Com to furnish some of this equipment. Pro Com refused to do so.

B. THE TRIAL AND APPEAL

At the time of Hornsby's injury, Pro Com did not subscribe to workers' compensation insurance. Consequently, Hornsby sued Pro Com, Leitch, and Crews for common law negligence. Hornsby asserted that all three defendants did not provide a safe work place and equipment, did not provide proper equipment, did not provide a protective lift belt, and did not give safety instructions and training. The jury found that Hornsby's injury occurred while he acted as a Pro Com employee, that the negligence of Pro Com, Leitch, and Crews proximately caused Hornsby's injuries, that Hornsby's damages were $594,000, and that Pro Com was not the alter ego of Leitch and Crews. The trial court rendered judgment on the jury verdict and held Pro Com, Leitch, and Crews jointly and severally liable for the damages the jury awarded together with prejudgment interest. The court of appeals affirmed the trial court's judgment.

II. OFFICER'S LIABILITY

Leitch and Crews contend that the court of appeals erred in affirming the trial court's judgment that they were individually liable for Hornsby's injuries. The court of appeals noted that the jury found both Leitch and Crews guilty of negligence proximately causing Hornsby's injury. The court of appeals held that a corporate officer may be personally liable for corporate wrongdoing when that officer is an active participant in the tortious conduct or has actual or constructive knowledge of the corporation's tortious conduct. The court of appeals observed that imposing personal liability on a corporate agent presupposes the agent participated in the wrongdoing or that the agent had knowledge of and consented to the wrongdoing. Leitch and Crews argue that this presupposition is erroneous because Leitch and Crews, as corporate officers, owed no individual duty to Hornsby as a Pro Com employee.

Hornsby argues that he sued Leitch and Crews as individuals and not as corporate officers. He asserts that because the jury found both Leitch and Crews individually liable the court of appeals correctly affirmed the trial court's judgment. Hornsby argues that Leitch and Crews are individually responsible because of their positions at Pro Com, their knowledge of the work, and the fact that an employer has a nondelegable and continuous duty to an employee to provide a safe place to work.

A. APPLICABLE LAW

An employer is not an insurer of its employees' safety at work; however, an employer does have a duty to use ordinary care in providing a safe work place. I.M. Werner v. Colwell, 909 S.W.2d 866, 869 (Tex.1995). For decades, this Court has recognized that this duty is an implied part of the employer-employee relationship. See Missouri, Kan. & Tex. Ry. v. Hannig, 91 Tex. 347, 43 S.W. 508, 510 (1897). When the employer is a corporation, the law charges the corporation itself, not the individual corporate officer, with the duty to provide the employee a safe workplace. Fort Worth Elevators Co. v. Russell, 123 Tex. 128, 70 S.W.2d 397, 401 (1934), disapproved on other grounds, 725 S.W.2d 712, 714 (Tex.1987); Harrison v. Oliver, 545 S.W.2d 229, 230 (Tex.Civ.App.--Houston [1st Dist.] 1976, writ dism'd); see also J. Weingarten, Inc. v. Moore, 449 S.W.2d 452, 453 (Tex.1970) (no liability against corporate agent absent individual duty to fellow employee).

A corporate officer or agent can be liable to others, including other company employees, for his or her own negligence. However, individual liability arises only when the officer or agent owes an independent duty of reasonable care to the injured party apart from the employer's duty. See Colwell, 909 S.W.2d at 868; Karl & Kelly Co. v. McLerran, 646 S.W.2d 174, 175 (Tex.1983); RESTATEMENT (SECOND) OF AGENCY § § 343, 350 (1958). For example, an agent whose negligence causes an auto accident may be held individually liable along with his or her employer when driving in the course and scope of employment. See Schneider v. Esperanza Transmission Co., 744 S.W.2d 595, 596-97 (Tex.1987)(liability for negligent entrustment "rests upon the combined negligence of the owner [employer] ... and negligence of the driver"); Le Sage v. Pryor, 137 Tex. 455, 154 S.W.2d 446, 448 (App.1941) (employer and employee subject to liability for auto accident). Because the agent owes a duty of reasonable care to the general public regardless of whether the auto accident occurs while driving for the employer, individual liability may attach. See Schneider, 744 S.W.2d at 596-97.

Thus, unless alter ego is established, corporate officers and agents are subject to personal liability for their actions within the employment context only when they breach an independent duty of care. See Colwell, 909 S.W.2d at 868; Fort Worth Elevators, 70 S.W.2d at 401; see also Holloway v. Skinner, 898 S.W.2d 793, 795 (Tex.1995).

B. APPLICATION OF LAW TO FACTS

Here, the jury found that Pro Com, Leitch, and Crews were each negligent and responsible for Hornsby's injuries. However, the jury also found that Hornsby was Pro Com's employee and failed to find Pro Com was the alter ego of Leitch and Crews. The court of appeals held that a corporate officer is not shielded from personal liability and that an officer may be found negligent for the officer's own acts. The court of appeals noted that there was evidence that Leitch and Crews, officers and shareholders of Pro Com, took an active role in the managing the daily operations of Pro Com, Hornsby's employer. The court of appeals concluded that when an officer performs duties for his principal, the officer owes a duty to avoid negligence, whether active or passive. Based on the evidence in the record and the legal conclusions it reached, the court of appeals affirmed the trial court's judgment. We conclude the court of appeals erred because it did not properly analyze the source of the duty breached in this case.

Leitch and Crews were not Hornsby's employers. The jury found that Pro Com was Hornsby's employer. As Hornsby's employer, Pro Com had the nondelegable duty to use ordinary care in providing Hornsby with a safe workplace. Werner, 909 S.W.2d at 869; Harrison, 545 S.W.2d at 230. However, the jury did not find that Pro Com was the alter ego of Leitch and Crews. Accordingly, under the record and as a matter of law, Leitch and Crews were acting within their capacities as officers of Pro Com and not in their individual capacities. The alleged actions by Leitch and Crews, whether active or passive, were actions of a corporate officer on behalf of Pro Com and deemed Pro Com's acts. Holloway, 898 S.W.2d at 795. Leitch and Crews had no individual duty as corporate officers to provide Hornsby with a safe workplace. The duty to provide a safe workplace was a nondelegable duty imposed on, and belonging solely to, Pro Com. Fort Worth Elevators, 70 S.W.2d at 401; Harrison, 545 S.W.2d at 230. The record does not show a breach of any other duty by Leitch and Crews. Because a corporate officer acting on the corporation's behalf does not owe a corporate employee an individual duty to provide that employee with a safe work place, and because Leitch and Crews did not breach any separate duty, the court of appeals erred in affirming their individual liability. We hold Leitch and Crews are not...