Massage Heights Franchising v. Hagman
Docket Number | 14-22-00160-CV |
Decision Date | 26 October 2023 |
Citation | 679 S.W.3d 298 |
Parties | MASSAGE HEIGHTS FRANCHISING, LLC, Appellant v. Danette HAGMAN, Appellee |
Court | Texas Court of Appeals |
On Appeal from the 234th District Court, Harris County, Texas, Trial Court Cause No. 2018-02795
Trey Langston Dolezal, Austin, Forrest Jacob Wynn, Bryon Rice, Jessica Z. Barger, Rachel Hope Stinson, Pamela C. Hicks, Houston, for Appellant.
Anjali Nigam, Houston, Patrick Scott, Conroe, Timothy F. Lee, Houston, for Appellee.
Panel consists of Justices Bourliot, Poissant, and Wilson.
Appellant Massage Heights Franchising, LLC ("MH Franchising") appeals a judgment in favor of appellee Danette Hagman ("Hagman") following a jury trial. MH Franchising presents four issues on appeal: (1) it is not liable under a negligence theory, (2) it is not liable under a negligent-undertaking theory, (3) Hagman may not recover punitive damages because the cause of Hagman’s injury was a criminal act, and (4) a new trial is warranted. Be- cause Hagman’s injury was caused by a criminal act and § 41.005 of the Texas Civil Practice and Remedies Code prohibits the award of punitive damages for the criminal acts of another, we reverse the part of the trial court’s judgment awarding punitive damages against MH Franchising and affirm the remainder of the judgment. See Tex. Civ. Prac. & Rem. Code Ann. § 41.005.
MH Franchising licenses its trademarks, service marks, and its business system 1 to franchisees. The franchisees then operate a business offering professional therapeutic and facial massage services to the general public under the "Massage Heights" name and emblem while providing the Massage Heights services. The relationship between MH Franchising and the franchisee is governed by a contract ("the franchise agreement") and MH Franchising’s daily operation manual ("the Manual"). In 2015, MH Franchising granted MH Alden Bridge, LLC ("MH Alden Bridge") a franchise location in The Woodlands, Texas. MH Alden Bridge is owned by OMG MH Holdings, LLC ("OMG Holdings"), of which Eric Oliver ("Oliver") is its president.
On or about September 7, 2017, Hagman was sexually assaulted by her masseuse, Mario Rubio ("Rubio"), during a massage at the MH Alden Bridge location. Hagman brought a lawsuit against Rubio, OMG Holdings, Oliver, MH Alden Bridge, and MH Franchising asserting multiple claims for negligence, premises liability, vicarious liability, respondeat superior, violations of the Texas Deceptive Trade Practices Act, and gross negligence.2
Ragman’s claims were tried before a jury. Hagman presented testimony from Ben Benjamin ("Benjamin"), an expert on the massage industry; Mark C. Siebert, who testified regarding franchise operations; Shane Evans ("Evans"), who founded MH Franchising, served as its CEO, and is a current board member; and Crystal Lizama, MH Franchising’s former vice-president of business development. The jury also heard testimony from various witnesses regarding the effect the assault had on Hagman. Hagman introduced into evidence, in relevant part, emails showing that MH Franchising was aware of sexual assaults at its franchises; a copy of the franchise agreement for the MH Alden Bridge location; the Manual; and other business documentation and communications from MH Franchising. MH Franchising did not present any witnesses and moved for a directed verdict on all of Hagman’s claims against it, arguing that there was no evidence to support Hagman’s claims and that Rubio’s criminal act was a new and independent cause that broke the chain of causation. The trial court denied MH Franchising’s requests for a directed verdict.
Based on jury findings, the trial court entered judgment that all the defendants were negligent for causing the occurrence in question; that MH Franchising was fifteen percent responsible; and that Hagman was awarded $1,500,000.00 in damages and $1,800,000.00 in exemplary damages. This appeal followed.
In its first issue, MH Franchising argues it is not liable under a negligence theory to Hagman because (a) it did not retain control over MH Alden Bridge’s hiring, firing, and supervision of employees; (b) MH Franchising was unaware of any complaints about MH Alden Bridge or Rubio; (c) Texas required Rubio to be licensed by the State of Texas, undergo a criminal background check, and complete hundreds of hours of professional education and training; and (d) the additional background check performed by MH Alden Bridge revealed no sexually-based crimes or allegations. MH Franchising also argues under its first issue that (e) Rubio’s intentional criminal act was a superseding cause of Hagman’s sexual assault; and (f) there was no evidence of breach and causation.
[1, 2] The existence of a duty is generally a question of law, and that determination is made from the facts surrounding the occurrence in question. Tri v. J.T.T., 162 S.W.3d 552, 563 (Tex. 2005); see Pagayon v. Exxon Mobil Corp., 536 S.W.3d 499, 503 (Tex. 2017). When the issue on appeal is a question of law, we exercise de novo review and conduct an independent analysis of the record to arrive at our own legal conclusion. See El Paso Nat’l Gas Co. v. Minco Oil & Gas, Inc., 8 S.W.3d 309, 312 (Tex. 1999); Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1998); Rieves v. Bucee’s Ltd., 532 S.W.3d 845, 850 (Tex. App.—Houston [14th Dist.] 2017, no pet.).
[3, 4] A contract may impose control upon a party thereby creating a duty of care. Elliott-Williams Co. v. Diaz, 9 S.W.3d 801, 804 (Tex. 1999). Whether a franchisor owes a duty of a care to a franchisee’s customer is analyzed by the same legal principles governing the duties owed by a general contractor or premises owner based on the exercise of control over the franchisee’s work. See Dow Chem. Co. v. Bright, 89 S.W.3d 602, 605-06 (Tex. 2002); see, e.g., Fitz v. Days Inns Worldwide, Inc., 147 S.W.3d 467, 471 (Tex. App.—San Antonio 2004, pet. denied) (); see also Risner v. McDonald’s Corp., 18 S.W.3d 903, 906 (Tex. App.—Beaumont 2000, pet. denied) ( ).
[5] Thus, when a franchisor exercises some control over a franchisee’s work, the franchisor may be liable unless it exercises reasonable care in supervising the franchisee’s activity. See Dow Chem. Co., 89 S.W.3d at 606; see, e.g., Read v. Scott Fetzer Co., 990 S.W.2d 732, 735 (Tex. 1998) () ; see also Clayton W. Williams, Jr., Inc. v. Olivo, 952 S.W.2d 523, 528 (Tex. 1997) ) ; Redinger v. Living, Inc., 689 S.W.2d 415, 418 (Tex. 1985) ( ).
[6, 7] If the right of control over work details has a contractual basis, then the fact that no actual control was exercised will not absolve a franchisor of liability. Dow Chem. Co., 89 S.W.3d at 606; see Elliott-Williams Co., 9 S.W.3d at 804 (). The franchisor can be held liable if it has the right to control the means, methods, or details of the independent contractor’s work and the power to direct the order in which the work should be done. See Dow Chem. Co., 89 S.W.3d at 606; see, e.g., Redinger, 689 S.W.2d at 418 (). Further, the control must relate to the injury the negligence causes. Dow Chem. Co., 89 S.W.3d at 606; see Clayton W. Williams, Jr., Inc., 952 S.W.2d at 528.
[8] "Determining whether a contract gives a right of control is generally a question of law for the court rather than a question of fact for the jury." Dow Chem. Co., 86 S.W.3d at 606 (citing Lee Lewis Constr., Inc. v. Harrison, 70 S.W.3d 778, 783 (Tex. 2001)).
First, we address MH Franchising’s argument that it cannot be held liable based on any control it retained over MH Alden Bridge because the jury found that MH Franchising was not in control of Rubio in relation to the negligence that caused Hagman’s injury. The jury charge asked whether Oliver, OMG Holdings, and MH Alden Bridge were "strictly subject to the control of [MH] Franchising with respect to the conduct you have found negligent?"; the jury answered "No" as to each. However, whether MH Franchising controlled the means, methods, or details of the masseuses’ work and directed the order of their work through the franchise agreement is a question of law; thus, we conduct an independent analysis of the record to arrive at our own legal conclusion. See id.; Lee Lewis Constr., Inc., 70 S.W.3d at 783; Quick, 7 S.W.3d at 116.
[9] Here, the franchising agreement provided that:
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