Court Opinion

ID: 9769720
Source: CourtListenerOpinion
Date Created: 2023-08-29 14:59:45.787735+00
Date Added: 2024-06-11T15:44:44.011301
License: Public Domain

WALKER, Chief Justice,
dissenting.
The majority states that, “Respondent [Judge Shuffield] has in effect, therefore, pierced the corporate veil on the grounds that Jeffco is merely an alter ego of Carri-ere.” Accepting such as the “effect” of the trial court’s ruling, Judge Shuffield then gave Relator more than adequate notice and opportunity to “submit additional evidence _” Rather than presenting such evidence to Judge Shuffield, Relator attempts such presentation through mandamus.
Since the majority relies heavily on Sims for the proposition that the trial court improperly disregarded corporate fiction, we need look more closely at that case. Corporate fiction will be disregarded “when the corporate form has been used as a part of a basically unfair device to achieve an inequitable result.” Sims, 918 S.W.2d at 684 (citing Castleberry v. Branscum, 721 S.W.2d 270, 271 (Tex.1986), overruled by Tex. Bus. Corp. Act art. 2.21A(3) (Vernon Supp.1996)). Query: What is more unfair and inequitable than a claimant contending that his alleged injuries have resulted in “loss of earnings and loss of earning capacity,” while at the same time attempting to close the discovery door on the most probative evidence to that *867claim via, corporate fiction. Sims further cites Matthews Const. Co., Inc. v. Rosen, 796 S.W.2d 692, 693 (Tex.1990) for the proposition that, “[wjhen 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.... ” Id. It is certainly no abuse of discretion for a trial court to “see through” the concerted effort of a claimant to avoid discovery on a most material allegation in claimant’s suit. The discretion of a trial court to “see through” a potentially unfair tactic is exactly what equity is about.
The majority says: “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.” This issue may well be a fact-specific question of first impression, however there exists more than adequate authority justifying Judge Shuffield’s denial of Relator’s Motion to Quash. For example, Castleberry v. Branscum, 721 S.W.2d at 270, which was cited in Sims. In Castleberry, 721 S.W.2d at 273, our Texas Supreme Court set forth certain equitable considerations to be considered in disregard of corporate fiction:
Because disregarding the corporate fiction is an equitable doctrine, Texas takes a flexible fact-specific approach focusing on equity. Gentry v. Credit Plan Corp. of Houston, 528 S.W.2d [571, 575 (Tex.1975) ]; First Nat. Bank in Canyon v. Gamble, [134 Tex. 112, 132 S.W.2d 100, 103 (1939) ]; Pacific American Gasoline Co. v. Miller, 76 S.W.2d [833, 851 (Tex.Civ.App. — Amarillo 1934, writ ref'd) ]; Tigrett v. Pointer, 580 S.W.2d [375, 381-82 (Tex.Civ.App.— Dallas 1979, writ ref'd n.r.e.) ]. For example, in First Nat. Bank in Canyon v. Gamble, this court held that we would disregard the corporate fiction when the “facts are such that adherence to the fiction would promote injustice and lead to an inequitable result.” 132 S.W.2d at 105. More recently, in Gentry v. Credit Plan Corp. of Houston, we again took an equitable approach, holding that 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 thwarted by adherence to any particular theory of liability.” 528 S.W.2d at 575. Dean Hildebrand, a leading authority on Texas corporation law, stated well the equitable approach: “When this [disregarding the corporate fiction] should be done is a question of fact and common sense. The court must weigh the facts and consequences in each case carefully, and common sense and justice must determine [its] decision.” Hildebrand, Texas Corporations § 5 at 42 (1942).
Applying these principles to our present case, in a fact-specific, equitable manner, Judge Shuffield determined that Relator was the principle or sole owner of Jeffeo Plumbing Co., Inc. Clearly, from the facts before him, Judge Shuffield could determine, in acceptable discretionary fashion, that to deny defendants their requested discovery could promote injustice and lead to an inequitable jury finding on loss of earnings and loss of earning capacity.
It is apparent to this writer that Judge Shuffield did exactly what our Texas Supreme Court said to do, i.e., use commonsense. Relator’s reference to Judge Shuf-field’s ruling as “an egregious abuse of discretion” is certainly not justified in this case.
I would respectfully deny Relator’s Petition for Writ of Mandamus.