Case Name: David E. CARRIERE and Jeffco Plumbing Co., Inc., Relators, v. The Honorable Milton G. SHUFFIELD, Respondent
Court: Texas Courts of Appeals
Jurisdiction: Texas
Decision Date: 1997-07-24
Citations: 949 S.W.2d 862
Docket Number: No. 09-97-166 CV
Parties: David E. CARRIERE and Jeffco Plumbing Co., Inc., Relators, v. The Honorable Milton G. SHUFFIELD, Respondent.
Judges: Before WALKER, C.J., and BURGESS and STOVER, JJ.
Reporter: South Western Reporter Second Series
Volume: 949
Pages: 862–867

Head Matter:
David E. CARRIERE and Jeffco Plumbing Co., Inc., Relators, v. The Honorable Milton G. SHUFFIELD, Respondent.
No. 09-97-166 CV.
Court of Appeals of Texas, Beaumont.
Submitted May 29, 1997.
Decided July 24, 1997.
John Werner, Reaud, Morgan & Quinn, Beaumont, for relators.
Paul W. Gertz, Germer & Gertz, Philip Babón, III, Strong, Pipkin, Nelson & Bissell, Beaumont, for real parties in interest.
Before WALKER, C.J., and BURGESS and STOVER, JJ.

Opinion:
OPINION
BURGESS, Justice.
This is a mandamus action. Relator David E. Carriere is plaintiff in a lawsuit brought against Charles A. Kiker, Jr. and Charles A. Kiker III, individually and D/B/A Kiker Cattle Co. (Defendants), for personal injury and property damage, including future lost earning capacity, following a collision between Carriere's vehicle and a cow owned by defendants. Defendants, the Real Parties in Interest on appeal, filed a Notice of Intention to Take Deposition by Written Questions of the custodian of records for Jeffco Plumbing Co., Inc., Carriere's employer and Relator in this appeal. The notice further requested production of "any and all records as described on [sicl the attached questions and/or Exhibits(s) and any other such record in the possession, custody or control of the said witness, and every such record to which the witness may have access, pertaining to: David Carriere." According to defendants, Jeffco is a corporation owned and operated by Carriere and his wife. Defendants state they are seeking the requested documents to determine "the size of the business, the capital and labor employed, the income drawn from the business, and [Carriere's] participation" to assess Carriere's "true" earning capacity. Carriere has released to Defendants all of Jeffco's personnel records pertaining to his "job position, wages and salary, job attendance, job performance, job accidents and injuries, job medical history, and job absences for sickness, injury or other reasons."
Carriere filed a motion to quash which was denied as to any records after the date Carri-ere acquired his interest in the business. Carriere now asks this court to order Respondent to vacate his prior order and quash the deposition.
"A writ of mandamus will issue only to correct trial court actions when there has been a clear abuse of discretion or the violation of a duty imposed by law and when the relator has no adequate remedy on appeal." Freeman v. Bianchi, 820 S.W.2d 853, 857 (Tex.App. — Houston [1st Dist.] 1991, orig. proceeding), approved sub nom. Granada Corp. v. Honorable First Court of Appeals, 844 S.W.2d 223, 225 (Tex.1992). The test for abuse of discretion is whether the court acted without reference to any guiding rules and principles and whether the act was arbitrary and unreasonable. Freeman, 820 S.W.2d at 858. A clear abuse of discretion exists when the court's decision is contrary to the one compelled by the facts and circumstances, thereby actually extinguishing any discretion in the matter. Id.
Mandamus "is the appropriate remedy when the trial court has erroneously granted discovery of non-discoverable documents. Remedy by appeal in that case is ineffective, because once revealed, the documents cannot be protected." Cigna Corp. v. Spears, 838 S.W.2d 561, 564 (Tex.App. — San Antonio 1992, orig. proceeding) (citing Walker v. Packer, 827 S.W.2d 833, 843 (Tex.1992)).
We first address defendants' argument that mandamus is inappropriate because there exists an adequate remedy by appeal. It is not Carriere the deposition targets, but Jeffco. Jeffco is not a party in the underlying suit and therefore cannot appeal from it. Additionally, as noted above, remedy by appeal is ineffective in the case of discovery of non-discoverable documents. We find mandamus is appropriate in this case.
Respondent's rationale for denying Carri-ere's motion was his status as owner of the corporation. The motion was denied absent a showing Carriere was not the principal or sole owner of Jeffco. Respondent has in effect, therefore, pierced the corporate veil on the grounds Jeffco is merely an alter ego of Carriere.
It is not enough to pierce the corporate veil that the corporation be owned or controlled by an individual; Texas law requires more. See Sims v. Western Waste Indus., 918 S.W.2d 682, 684 (Tex.App.— Beaumont 1996, writ denied). In Sims, this court recognized the corporate fiction may be disregarded only in certain circumstances:
The Texas Supreme Court has held that the corporate fiction will be disregarded "when the corporate form has been used as part of a basically unfair device to achieve an inequitable result." Castleberry v. Branscum, 721 S.W.2d 270, 271 (Tex.1986), overruled by Tex.Bus.Corp.Act art. 2.21A(3) (Vernon Supp.1996) to the extent that failure to observe corporate formalities and constructive fraud are no longer factors in proving alter ego in contract claims. "The purpose in disregarding the corporate fiction 'is to prevent use of the corporate entity as a cloak for fraud or illegality or to work an injustice, and that purpose should not be thwartedId. at 273 quoting Gentry v. Credit Plan Corp. of Houston, 528 S.W.2d 571, 575 (Tex.1975). The Court has subsequently held that "[wjhere a corporate entity is owned or controlled by an individual who operates the company in a manner indistinguishable from his personal affairs and in a manner calculated to mislead those dealing with him to their detriment, the corporate fiction may be disregarded." Mancorp, Inc. v. Culpepper, 802 S.W.2d 226, 229 (Tex.1990)(emphasis added). "When the corporate form is used as an essentially unfair device — when it is used as a sham— courts may act in equity and disregard the usual rules_" Mattheios Const. Co., Inc. v. Rosen, 796 S.W.2d 692, 693 (Tex.1990).
The courts of appeals have similarly recognized the corporate form is to be disregarded when the corporation is created to avoid a legal obligation, is used against public policy, or is used to perpetrate a fraud. See Valley Mechanical Contractors, Inc. v. Gonzales, 894 S.W.2d 832, 834 (Tex.App. — Corpus Christi 1995, no writ); Crum & Forster, Inc. v. Monsanto Co., 887 S.W.2d 103, 147-148 (Tex.App. — Texarkana 1994, no writ); Mortgage and Trust, Inc. v. Bonner & Co., Inc., 572 S.W.2d 344, 349 (Tex.Civ.App. — Corpus Christi 1978, writ ref'd n.r.e.); Siboney Corp. v. Dresser Industries, Inc., 521 S.W.2d 639, 642 (Tex. Civ.App. — Houston [1st Dist.] 1975, writ ref'd n.r.e.); Eastwood Model Market v. State, 359 S.W.2d 294, 296 (Tex.Civ.App.— Austin 1962), affirmed, 365 S.W.2d 781 (Tex.1963).
Id. at 684-685.
The materials filed in this proceeding contain neither any evidence nor allegations that any of the circumstances detailed above are present in the current case. We are aware of no authority, and defendants provide none, permitting a defendant to obtain the corporate records of a non-party merely because an employee of the corporation has filed suit for personal injuries alleging lost future earning capacity. The trial court's denial of the motion on the basis of alter ego is without foundation and contrary to the guiding rules and principles outlined above. The facts and circumstances compelled the granting of the motion; the trial court had no discretion to deny it.
Therefore, we conclude the trial court abused its discretion in denying Carriere's motion to quash. We are confident the trial court will vacate its order compelling production. Mandamus will issue only upon failure to do so. The writ of mandamus is conditionally granted.
.In Exhibit A attached to the questions, Defendants asked Jeffco to:
Produce the following documents for the time period from the date of [sic] David Carriere acquired an ownership interest in Jeffco Plumbing to the present:
1. Each and every employment record including, but not limited to, personnel, payroll, and medical pertaining to David Carriere.
2. All records showing any payments of any kind to David Carriere (whether salary, loans, dividends, profit distributions or any other money).
3. Income tax returns for the period in question for Jeffco Plumbing.
4. Balance Sheets, income statements and financial statements for the period in question.
5. All documents regarding David Carriere's acquisition of any financial interest in Jeffco Plumbing (such as a purchase contract, bill of sale, etc.)
6. All documents reflecting sales, income, expenses, profits and net profits of David Carri-ere and/or Jeffco Plumbing for the period in question to present.