Court Opinion

ID: 9772634
Source: CourtListenerOpinion
Date Created: 2023-08-29 17:24:26.583049+00
Date Added: 2024-06-11T07:31:46.415278
License: Public Domain

DUNCAN, Justice,
dissenting.
As phrased by Stop N Go and the majority, the issue in this ease is whether Stop N Go owes Brooks a duty to provide a safe workplace under the “right to control safety and security of the workplace” test set forth in Exxon Corp. v. Tidwell, 867 S.W.2d 19 (Tex.1993). Applying this test to the summary judgment proof, the majority holds that there is a “material issue of fact as to whether Stop N Go owed a duty to appellant to maintain a safe workplace.”
In my view, a fact issue on right to control is immaterial in the context of this case; accordingly, I neither agree nor disagree with the majority as to whether the summary judgment proof raises a fact issue as to Stop N Go’s right to control. My disagreement with the majority arises instead out of its reliance on the Exxon right to control test and its interpretation of Rule 166a(c), Tex. R.Cxv.P., as precluding an affirmance. I would hold that, as a matter of law, a wholly-owned subsidiary is an “agent” of its parent for purposes of the Workers’ Compensation Act and, if either provided workers’ compensation coverage, neither is subject to suit by an employee. I would further hold that Rule 166a(c) does not preclude, and Rule 81(b)(1), Tex.R.App.P., mandates, affirmance.
In my view, a single undisputed fact so distinguishes this case from Exxon as to render the Exxon test inapplicable: Stop N Go is a wholly-owned subsidiary of NCS, Brooks’ employer. The importance of this fact is evidenced by examining the effect that a judgment against Stop N Go would have in this case. When an employee recovers on a third-party claim, the workers’ compensation carrier is subrogated to the employee’s recovery to the extent of the benefits paid; the third-party tortfeasor is thus ultimately made to bear the loss occasioned by its wrongful conduct. See Pan American Ins. Co. v. Hi-Plains Haulers, 163 Tex. 1, 350 S.W.2d 644 (1961); Tex.Lab.Code § 417.001(b) (Vernon Pamph.1995) (similar provision formerly located at Tex.Rev.Civ. StatAnn. art. 8307, § 6a).
NCS’s compensation carrier will thus have a right of subrogation against Stop N Go to the extent of the benefits paid. But, because Stop N Go is a wholly-owned subsidiary of NCS, this right of subrogation will exist only in the most theoretical sense. If Brooks recovers a judgment against Stop N Go, Brooks or NCS’s compensation carrier or both will — directly or indirectly — collect from NCS, Stop N Go’s sole shareholder. Therefore, regardless of whether a right of subro-gation is actually asserted, a judgment against Stop N Go will deprive NCS of the benefit of affording Brooks workers’ compensation coverage — the exclusive remedy bar of the Workers’ Compensation Act.1
For this reason alone, I would not apply the Exxon test. I would instead hold, as a matter of law, that the undisputed fact that Stop N Go is a wholly-owned subsidiary of NCS conclusively establishes that Stop N Go is an “agent” of NCS; therefore, if either NCS or Stop N Go provided workers’ compensation coverage, neither is subject to suit by an employee for breach of a duty to provide a safe workplace. Cf. McKelvy v. Barber, 381 S.W.2d 59, 62 (Tex.1964) (agents, servants, and employees protected by exclusive remedy bar, and whether defendant is agent of employer depends upon whether employer had right to control physical details of defendant’s performance); Gentry v. Credit Plan Corp. of Houston, 528 S.W.2d 571, 573 (Tex.1975) (corporate fiction disregarded in tort case “where management and operations [of a parent and its wholly-owned subsidiary] are assimilated to the extent that the *908subsidiary is simply a name or conduit through which the parent conducts its business”); 2 Lawler v. Dallas Statler-Hilton JV, 793 S.W.2d 27, 34 (Tex.App. — Dallas 1990, writ denied) (holding that both joint venturer and joint venture are employers of employee of joint venture for purposes of workers’ compensation); Watson v. Nortex Wholesale Nursery, 830 S.W.2d 747 (Tex.App. — Tyler 1992, writ denied) (whether employee even has cause of action against corporation that is intimately related to employer “conjectural”).
My final point of disagreement with the majority is on the proper interpretation of Rule 166a(c) in the unusual context of this case. I recognize that our summary judgment rule provides that a motion for summary judgment “shall state the specific grounds therefor.” Tex.R.Civ.P. 166a(c). The rule also provides, however, that “[Tissues not expressly presented to the trial court by written motion, answer or other response shall not be considered on appeal as grounds for reversal.” Tex.R.Civ.P. 166a(c) (emphasis added). Nowhere does Rule 166a prohibit an affirmance on an unpresented ground. And nowhere does Rule 166a purport to alter Rule 81(b)(1), Tex.R.App.P., which provides that “[n]o judgment shall be reversed on appeal ... unless ... the error complained of amounted to such a denial of the rights of the appellant as was reasonably calculated to cause and probably did cause rendition of an improper judgment in the ease, or was such as probably prevented the appellant from making a proper presentation of the case to the appellate court_” Tex. R.App.P. 81(b)(1). This aspect of Rule 166a(c) and Rule 81(b)(1) appear to flow directly from the mandate of Rule 1 to liberally construe the rules “to obtain a just, fair, equitable and impartial adjudication of the rights of litigants under established principles of substantive law” ... “with as great expedition and dispatch and at the least expense both to the litigants and to the state as may be practicable_” Tbx.R.Civ.P. I.3
In my view, Rule 166a(c), when construed in the light of Rules 1 and 81(b)(1), should not require a remand when a dispositive issue has been addressed and conclusively established by the summary judgment proof, and there is no possibility that the non-movant can prevail on remand. As Justice Heeht has noted: “All ... rules can be applied under the rubric of literal construction to defeat their own purposes unless those purposes govern and define the rules. The underlying principles must control.” McConnell v. Southside I.S.D., 858 S.W.2d 337, 347 (Tex.1993) (Hecht, J., dissenting). I believe this case clearly demonstrates that a rigid construction of Rule 166a(c) may defeat rather than serve the purpose of the rule.
The parties’ summary judgment proof addresses and conclusively establishes that Stop N Go is a wholly-owed subsidiary of NCS. In another context, this might amount to a merely uncontroverted fact that defeats the cause of action on an unpresented ground; in that situation, I believe Rule 166a(e) would require a remand to enable the non-movant to present additional summary judgment proof to raise a fact issue on the unpresented ground. Indeed, that is the purpose of the rule. But, in the context of this case, the fact is not simply uncontrovert-*909ed; it is uncontroverted, incontrovertible, and dispositive. In my opinion, Brooks cannot recover against Stop N Go, regardless of the legal theory employed and regardless of the presence or absence of any other fact. This is simply not a case in which a remand will achieve the fundamental goal of fairness underlying Rule 166a(c). Rather, this is a case in which the defect cannot be cured on remand. Accordingly, remanding this ease can and will achieve nothing more than imposing additional costs and delay on the litigants and our taxpayer-supported judicial system, contrary to the letter and the spirit of Rule 1. I may be wrong, but I cannot and will not attribute that intent to our supreme court either in its promulgation of Rule 166a(c) or in its decisions in Clear Creek4 and McConnell, neither of which involved the unusual circumstances before this court in this case — the parties’ failure to recognize the true legal significance of the undisputed, material fact of Stop N Go’s status as a wholly-owned subsidiary of Brook’s employer. See McConnell, 858 S.W.2d at 344, (Gonzalez, J., concurring in judgment only), 347, 349 (Hecht, J., joined by Cornyn, J., dissenting) (dissenting in part because of the plurality’s failure to apply harmless error standard and noting that, insofar as the plurality’s opinion purports to preclude summary judgment on a ground established by the summary judgment evidence, it is dicta), id. at 349-50 (Enoch, J., joined by Phillips, C.J., dissenting) (dissenting because of the plurality’s failure to apply harmless error standard).
For these reasons, I respectfully dissent.

. Tex.Lab.Code § 408.001 (Vernon Pamph.1995) (similar provision formerly located at Tex.Rev.Civ. Stat.Ann. art. 8306, § 3(a)).

. In my view, there is no evidence in the summary judgment record before us to suggest that NCS operated Stop N Go as anything other than a business conduit. The undisputed summary judgment proof establishes that NCS alone hires employees and maintains bank accounts; NCS pays for all merchandise placed in Stop N Go stores; NCS pays all rent, salaries, and other expenses, but for tax purposes "attributes” these expenses to the appropriate Stop N Go subsidiary; both Gallerno and Bravenec testified, and the disclosure statement filed by NCS in the bankruptcy court unequivocally states, that NCS operates the stores "under the name of Stop N Go.” Indeed, in describing the relationship between NCS and Stop N Go, Bravenec referred to "National Convenience Stores d/b/a Stop-N-Go.”

. At the time Rule 1 was written, of course, the Texas Rules of Civil Procedure included the rules governing appellate procedure. The fact that the 1986 enactment of the Texas Rules of Appellate Procedure separated the trial and appellate rules is, in my view, of no importance. Wherever located, the rules must be interpreted in the spirit mandated by Rule 1.

. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 677 (Tex.1979).