Court Opinion

ID: 2866509
Source: CourtListenerOpinion
Date Created: 2015-09-06 01:39:14.900768+00
Date Added: 2024-06-11T12:40:54.447940
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-03-00011-CV

Billy Salyers, Individually and d/b/a Aquarius Plumbing, Appellant

v.

Texas Workers' Compensation Insurance Fund, Appellee

FROM THE COUNTY COURT AT LAW NO. 1 OF TRAVIS COUNTY
NO. 247643, HONORABLE J. DAVID PHILLIPS, JUDGE PRESIDING

M E M O R A N D U M   O P I N I O N

	The Texas Workers' Compensation Insurance Fund ("the Fund") sued Billy Salyers
to recoup insurance payments owed regarding coverage for Salyers' business, Aquarius Plumbing
("Aquarius").  According to the record, Aquarius had been jointly owned by Salyers and his wife,
Sheila Salyers, until they divorced and he took over the business as a portion of his share of the
community property.  Salyers responded that he was not personally liable for the insurance payments
because he had not signed the insurance agreement, and filed a counterclaim under the deceptive
trade practices act.  See Texas Bus. and Com. Code Ann. § 17.46(b)(23) (West Supp. 2003)
("DTPA").  The Fund filed a hybrid summary judgment motion on the DTPA claim and a traditional
summary judgment motion regarding the underlying debt and requesting attorney's fees.  See Tex.
R. Civ. P. 166(a)(c),(i).  The trial court granted both of the Fund's motions, and Salyers appeals,
arguing that (1) summary judgment was improper on the Fund's claim because there remains a fact
issue regarding whether he is obligated under the insurance contract, and (2) partial summary
judgment was inappropriate on his counterclaim because the Fund filed suit in Travis County.

DISCUSSION

	The Fund, under a contract signed by Sheila Salyers, provided Aquarius with
workers' compensation insurance coverage between September 28, 1994 and September 28, 1996. 
The Salyerses later divorced, and under their 1998 divorce decree, Billy Salyers acquired all of
Aquarius as part of the community property settlement. 
	The summary judgment evidence reveals that invoice statements addressed to Sheila
Salyers, doing business as Aquarius, indicate that the Fund billed Aquarius for the two insurance
periods.  However, Aquarius never paid its obligations.  The Fund sent a demand letter to Sheila
Salyers on behalf of Aquarius, and then brought suit against Billy Salyers, individually and doing
business as Aquarius, to recoup the debt owed by Aquarius.

The Fund's Claim
	We review the grant of a traditional motion for summary judgment de novo.  The
movant has the burden to show that no genuine issue of material fact exists and that he is entitled
to judgment as a matter of law.  American Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex.
1997) (citing Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985)).  Salyers claims
that there exists an issue of fact as to whether he has a contract with the Fund.  Salyers also claims
that summary judgment is inappropriate as a matter of law because the Fund's motion for summary
judgment did not negate Salyers's affirmative defenses and because the summary judgment does not
support the Fund's motion to support the attorney's fees award.
	We need not address Salyers's affirmative defenses because they have been waived. 
Salyers raised the affirmative defenses in his answer to the Fund's petition, but not in his response
to the Fund's motion for summary judgment.  Merely alleging an affirmative defense does not
prevent the trial court from granting summary judgment.  See American Petrofina v. Allen, 887
S.W.2d 829, 830 (Tex. 1994); Nichols v. Smith, 507 S.W.2d 518, 520 (Tex. 1974).  If a party
opposing summary judgment relies on an affirmative defense, he must come forward with summary
judgment evidence sufficient to raise an issue of fact on each element of the defense to avoid
summary judgment.  Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984).  Salyers has
presented no such evidence.
	Salyers's main complaint appears to be that the summary judgment evidence does not
indicate that he personally signed the insurance contract with the Fund.  Sheila Salyers signed the
agreement on behalf of Aquarius.  According to Salyers, the family code prevents him from being
liable for an obligation regarding Aquarius entered into under his wife's name.  See Tex. Fam. Code
Ann. § 3.201 (West 1998) (individuals not liable for spouse's contracts unless entered into for the
purchase of necessary items).  The Fund responds that Salyers would have been liable as a partner
in Aquarius regardless of whether he was previously married to Sheila Salyers and that he has
accepted any liabilities incurred by Aquarius by agreeing to the divorce decree.
	We agree with the Fund.  Although Sheila Salyers signed the contract, she did so on
behalf of Aquarius.  The relevant business records reveal that both of the Salyerses were considered
to be "doing business as" Aquarius plumbing.  Because they do not enjoy the protection of corporate
status, individuals who do business as an unincorporated entity are personally liable for the entity's
obligations.  See, e.g., A to Z Rental Ctr. v. Burris, 714 S.W.2d 433, 436 (Tex. App.--Austin 1986,
writ ref'd n.r.e.).  Although Salyers contends on appeal that the Fund's summary judgment evidence
at most raises a fact issue as to whether he was a co-owner of Aquarius at the time the debt was
incurred, he has never before raised that argument.  The Fund has consistently argued that Salyers
is liable as the owner of Aquarius.  Both Salyerses are listed as "owners" of Aquarius in the
Employer's Quarterly Reports for the period.  More importantly, the Fund's records list both
Salyerses as owners of Aquarius.  At the very least, the summary judgment evidence shows that both
of the Salyerses held themselves out to the Fund as co-owners of Aquarius for purposes of the
insurance agreement.  See Tex. Rev. Civ. Stat. Ann. art. 6132b-2.02 (West Supp. 2003) (a
partnership is created by "an association of two or more persons to carry on a business for profit as
owners").  While the divorce decree specifically assigned Salyers any remaining liability for vehicles
belonging to Aquarius, it did not specifically assign him the remaining business debts.  This does
not conflict with the other evidence regarding Salyers's ownership interest in Aquarius. Absent
conflicting evidence, the summary judgment proof is sufficient to support the Fund's claim that
Salyers is liable in that he was "doing business as" Aquarius.  Salyers has been sued in that capacity
and has never objected thereto. (1)  We will not disturb the trial court's determination. (2) 
	Likewise, Salyers's claim regarding attorney's fees rests on the assumption that the
Fund's cause of action is against Sheila Salyers, individually, rather than against Billy Salyers.  See
Tex. Civ. Prac. & Rem. Code Ann. § 38.002 (West 1997) (to recover attorney's fees, claimant must
present claim to opposing party).  The summary judgment evidence includes proof that presentment
was made to Aquarius by service on Sheila Salyers.  Because Salyers is liable for Aquarius's debt,
and presentment has properly been made on Aquarius, presentment has properly been made on Billy
Salyers, individually, as well.  We overrule Salyers's first issue.

Salyers's Counterclaim
 Salyers's counterclaim assumes that as a matter of law his business relationship with
the Fund must have been based on a contract that he personally signed.  The DTPA penalizes
plaintiffs for filing suit on contractual obligations involving the payment of money "primarily for
personal, family, household or agricultural use" in any county other than the defendant's county of
residence.  Tex. Bus. & Com. Code Ann. § 17.46(b)(23).  Accordingly, Salyers claims that the Fund
has improperly brought suit against him in Travis County and is subject to DTPA penalties.  Based
on this theory, Salyers filed a motion to transfer venue and a counterclaim for damages.
	The Fund responded, arguing that under the traditional summary judgment standard,
its summary judgment proof established that the insurance contract was not primarily for personal
use. (3)  It attached a copy of the agreement.  The contract was an agreement to provide workers'
compensation insurance to Aquarius, a plumbing business.  This is more than sufficient evidence to
establish that the contract does not fall within section 17.46's protection.  Accordingly, Salyers's
second and third issues are overruled.

CONCLUSION

	We affirm the trial court's decision.

  
					Mack Kidd, Justice
Before Chief Justice Law, Justices Kidd and Patterson
Affirmed
Filed:   August 29, 2003
1. 	A defendant must file a verified pleading to challenge the legal capacity under which he
is sued.  Tex. R. Civ. P. 93(14).  Because Salyers has filed no such pleading, he has waived any
complaint regarding being sued in his capacity of "doing business as" Aquarius.  See Nootsie, Ltd.
v. Williamson County Appraisal Dist., 925 S.W.2d 659, 662 (Tex. 1996).
2. 	Salyers's reliance on the family code, furthermore, is misplaced.  Section 3.201 of the
family code insulates a person from his spouse's obligations unless the spouse acts as the person's
agent or incurs a debt for necessaries.  Tex. Fam. Code Ann. § 3.201 (West 1998).  However, the
divorce decree states that Aquarius is community property.  Section 3.202 of the family code protects
a spouse from liability for debts incurred by the other spouse only in circumstances where the
community property is subject to the other spouse's "sole management, control, and disposition." 
Id. § 3.202(b) (West 1998).  Salyers did not argue in his response to the motion for summary
judgment or in his pleadings that Aquarius was in Sheila Salyers's sole management, control, and
disposition.  Furthermore, the debt was owed by Aquarius, not by Sheila Salyers alone.  Although
Salyers never raised the argument, the summary judgment evidence suggests that Aquarius was
community property managed jointly by the Salyers.  The family code does not insulate Salyers from
liability.
3.   Because we rely on the Fund's traditional summary judgment argument, we do not address
the aspects of their motion argued under the no-evidence standard.  See Tex. R. Civ. P. 166(a)(i).