Old Republic Ins. Co. v. EX-IM Services Corp.
| Decision Date | 22 February 1996 |
| Docket Number | No. 01-95-00364-CV,EX-IM,01-95-00364-CV |
| Citation | 920 S.W.2d 393 |
| Parties | OLD REPUBLIC INSURANCE COMPANY, Appellant, v.SERVICES CORP.,Group, Inc. and Refugio Gonzales, Jr., Appellee. (1st Dist.) |
| Court | Texas Court of Appeals |
Kristinia Kerwin, Joanne Vorpahl, Houston, for appellant.
Gerard Swonke, Ellen Gerson, Houston, for appellees.
Before WILSON, COHEN and O'CONNOR, JJ.
In this case the appellant, Old Republic Insurance Company (Old Republic), appeals from the trial court's rendition of a take-nothing judgment n.o.v. in favor of the appellees, EX-IM Services Corporation (EX-IM Services), EX-IM Group, Inc. (EX-IM Group), and Refugio Gonzales, Jr. (Gonzales).
In two points of error, Old Republic argues the trial court erred in disregarding the jury findings that (1) Gonzales was the alter ego of Jetero International Services, Inc. (Jetero International), EX-IM Services, and EX-IM Group, and (2) a single business enterprise existed among Jetero International, Refugio Gonzales, Jr. d/b/a Jetero Services (Jetero Services), EX-IM Services, and EX-IM Group because sufficient evidence was presented to support the findings. We reverse and render judgment.
Summary of facts
In its first amended petition, Old Republic brought claims against Jetero International, Jetero Services, EX-IM Services, and EX-IM Group for breach of contract and quantum meruit. Old Republic argued that the separate existence of these business entities should be disregarded.
At trial, Kathleen Dorman, a vice-president for Trade Insurance Services, Inc. (Trade Insurance), testified for Old Republic as to the background of the parties' dispute. Old Republic issues customs bonds to importers to secure duties owed on goods brought into the United States. Old Republic sold these bonds through its agent, Trade Insurance, to importers such as Jetero International. Gonzales owns 42.5 percent of outstanding Jetero International stock, and his brothers own the remaining shares. At that time, Jetero International performed freight forwarding and custom house brokerage. In February 1986, Gonzales resigned as an officer of Jetero International to work with an unrelated construction company. Gonzales retained his shares of Jetero International stock.
In June 1986, Old Republic issued a $30,000 bond to Jetero International. In March 1987, the United States Customs Service assessed duties of $17,832.11 on goods imported by Jetero International under that bond. That same month, Jetero International declared bankruptcy and subsequently did not pay the duties assessed. In May 1987, Gonzales filed an application to operate as a sole proprietorship d/b/a Jetero Services. Jetero Services performed freight forwarding, custom house brokerage, and construction management consulting. Less than one year later, in February 1988, Gonzales sent out a letter to his customers and vendors informing them:
Effective immediately, Jetero has changed its name to EX-IM Services Corp. Our address, telephone, telex and fax will remain the same. We sincerely hope that we can continue our mutually beneficial relationship. Please change your records to reflect our new name, and advise if any additional information is required.... We believe that our name change and our additional services will make us bigger and better than ever!
Trade Insurance received one of these letters, signed by Refugio Gonzales. Refugio Gonzales is the president of EX-IM Services and his wife, Santa Gonzales, is the sole shareholder. EX-IM Services also performs freight forwarding, custom house brokerage, and conducts an import-export business. Jetero International was not dissolved, and the bankruptcy proceeding was eventually dismissed in July 1988.
In November 1991, Gonzales' 18-year-old daughter, Dey Gonzales, formed EX-IM Group with herself as sole shareholder. EX-IM Group conducts export sales, custom forwarding, and custom house brokerage. Refugio Gonzales is the president of EX-IM Group and runs the business operations, and his brother Robert Gonzales is the vice-president and treasurer.
When Jetero International did not pay the amount owed on the March 1987 bond, the United States Treasury Department sent a formal demand letter to Old Republic seeking payment of $30,682.56 in November 1992. Old Republic paid the Treasury Department $28,489.20 to cover the amount due under the bond, reduced by prior claims it had already paid. Old Republic, through Trade Insurance, then sought payment from EX-IM Services for the amount owed on the bond, based on its receipt of the notification that "Jetero" had changed its name. Old Republic received no response to its letter.
Old Republic asserted its claim for repayment against Jetero International, Refugio Gonzales individually and d/b/a Jetero Services, EX-IM Services, and EX-IM Group, claiming the companies were operating as a single business enterprise and their corporate existence should be disregarded.
In December 1994, Old Republic obtained an interlocutory default judgment against Jetero International for the amount Old Republic paid on the bond plus interest, costs, and attorneys' fees. Old Republic's claims against Jetero International were then severed and the default judgment became final.
At trial, the jury found a single business enterprise existed among Jetero International, Jetero Services, EX-IM Services, and EX-IM Group, and found Gonzales was the alter ego of Jetero International, EX-IM Services, and EX-IM Group. The trial court granted the appellees' motion for judgment n.o.v. and rendered judgment that Old Republic take nothing on its claims.
We consider Old Republic's second point of error first because it is dispositive of their appeal. In their second point of error, Old Republic contends the trial court committed error in disregarding the jury's finding that a single business enterprise existed among Jetero International, Jetero Services, EX-IM Services, and EX-IM Group because legally sufficient evidence was presented to support that finding.
A trial court may render a judgment n.o.v. if there is no evidence to support one or more jury findings on issues necessary to liability. TEX.R.CIV.P. 301; Best v. Ryan Auto Group, Inc., 786 S.W.2d 670, 671 (Tex.1990). In determining a "no evidence" question, a reviewing court must consider only the evidence and reasonable inferences that tend to support the jury findings,...
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