Court Opinion

ID: 9350337
Source: CourtListenerOpinion
Date Created: 2022-12-26 00:10:53.703685+00
Date Added: 2024-06-11T16:49:39.434761
License: Public Domain

NO. 12-22-00025-CV

                          IN THE COURT OF APPEALS

               TWELFTH COURT OF APPEALS DISTRICT

                                     TYLER, TEXAS

FERRELL GAS, INC., FERRELL GAS,                   §      APPEAL FROM THE 7TH
L.P., AND MICHAEL SMALLING,
APPELLANT
                                                  §      JUDICIAL DISTRICT COURT
V.

MARVEL REESE,                                     §      SMITH COUNTY, TEXAS
APPELLEE

                                  MEMORANDUM OPINION
       Appellants Ferrell Gas, Inc., Ferrellgas L.P. and Michael Smalling appeal the trial court’s
order excluding their expert witness. In a single issue, Appellants urge the trial court abused its
discretion and that the exclusion of their expert amounts to an impermissible death penalty
sanction. We affirm.

                                            BACKGROUND
       On June 1, 2018, Marvel Reese was a passenger in a charter bus traveling on Interstate 20
in Smith County, Texas. Smalling was operating a propane truck owned by his employer
Ferrellgas when he collided with the bus.
       Reese filed suit against Appellants. She alleged Smalling was negligent and grossly
negligent in his operation of the truck.      She further alleged Ferrellgas was negligent via
respondeat superior, directly negligent in its hiring, training, entrustment, supervision, retention,
and monitoring of Smalling, and grossly negligent.
       At trial, Smalling admitted the accident was his fault. He acknowledged failing to keep a
proper lookout and maintain an appropriate following distance. Appellants offered to stipulate
liability based on Smalling’s admissions. Reese rejected the stipulation and claimed the accident
was also caused by Ferrellgas’s negligent hiring, retention, supervision, and training. As a result,
Reese pursued independent negligent findings against Smalling and Ferrellgas, in addition to
findings on gross negligence and exemplary damages.
           During discovery, Ferrellgas could not locate and did not produce Smalling’s pre-hire
background investigation, which is required by federal motor carrier regulations. Reese relied on
the missing background investigation for her negligent hiring claim during her case in chief. On
the final day of a five-day trial, Ferrellgas called its liability expert, David Hedgpath to testify.
At the beginning of his testimony, Hedgpath was asked, “Will you base any of your opinions on
the fact that if you haven’t seen something, that it doesn’t exist?” Hedgpath responded in the
negative.      On direct examination, Hedgpath testified that Ferrellgas met the regulatory
requirements in hiring Smalling and that his file contained all of the information required.
During cross-examination, Reese specifically asked Hedgpath if Ferrellgas complied with the
background investigation requirement. Hedgpath responded that he reviewed a document from a
third-party administrator that performed a background investigation of Smalling. Hedgpath then
provided a copy of the investigation to Reese.        Reese informed the trial court at a bench
conference that Ferrellgas had not produced the investigation in discovery. She also reminded
the trial court that Ferrellgas’s corporate representative, Douglas Null, testified that Smalling’s
file did not contain the investigation. Appellants’ counsel, Darrell Minton, claimed he did not
know where Hedgpath got the document and that he did not provide it to Hedgpath.
           Reese moved to strike Hedgpath’s testimony, urging that the untimely production of the
investigation was extremely prejudicial to her case. According to Minton, Null “somehow
acquired” the document following his testimony “and provided it directly to Mr. Hedgpath.”
When pressed by the trial court, Minton stated, “I had a strong belief that it did exist” prior to
calling Hedgpath as a witness. He stated that he had not “seen it, read it . . . I had a good-faith
belief it existed, but not that it had been given to Mr. Hedgpath.” He further admitted never
producing the document to Reese or informing her of its existence. Appellants argued that no
sanctions were necessary because the document could not be admitted into evidence. They
urged the document would have helped Ferrellgas’s defense, so they were prejudiced instead of
Reese. The trial court informed Appellants of the proper remedy when evidence is found during
a trial:

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        immediately go to your opposing counsel and you tell them, “We think we found this. What do
        you want to do about it?” Not keep it secret. Not keep it with only you knowing, and leave them to
        see if they find out about it by happenstance. That’s just not fair.

The trial court granted Reese’s motion to strike Hedgpath’s testimony and instructed the jury it
was not to consider any of Hedgpath’s testimony.
        The jury subsequently found both Smalling and Ferrellgas negligent and apportioned
them each fifty percent responsibility.            It awarded Reese a total of $800,000 in damages,
significantly less than the $1.25 million she sought. The jury found no gross negligence by
Smalling or Ferrellgas.
        Reese filed a post-verdict motion for sanctions based on Minton’s dishonesty about
Hedgpath’s receipt of the investigation. Appellants urged no sanctions were necessary. They
submitted an affidavit in which Minton admitted that he learned “on the evening of September 1,
2021 . . . that we had received a document that may have been a background check on Michael
Smalling.” He further claimed that he neither read the document nor provided it to Hedgpath.
At the hearing, Minton represented to the court:

        I got an email. There was an attachment. I had a good faith belief, but I knew I had too many
        things to do in this trial to bother reading a background check that I knew could not be admissible.
        I didn’t bother to read it. There was no motivation for me to read it. I chose to let the Plaintiffs
        have an unfair advantage, an advantage that they weren’t entitled to have except for the fact that
        my client hadn’t located a document until, what, day three of the trial.

Ferrellgas’s Director of Risk Management affirmed via affidavit that she found the document
and provided it to Mr. Null and counsel on September 1, the third day of trial. At the hearing,
Reese introduced a deposition excerpt from Hedgpath in another case.                          In that deposition,
Hedgpath was questioned about being struck at trial in the Ferrellgas case. Hedgpath testified
that he received the document from the defense team at a dinner two days before he testified at
trial. Prior to granting the motion for sanctions, the trial court stated:

        . . . it was intentionally not provided to them. You’ve effectively told me you intentionally did not
        look at something that was sent to you with an attachment about the case that you’re middle of the
        stinking trial on. I don’t see how a lawyer does that.

The trial court memorialized its trial order but granted no additional sanctions. This appeal
followed.

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                                            SANCTIONS
       In their sole issue, Appellants urge the trial court abused its discretion when it excluded
their expert’s testimony. Specifically, they urge the exclusion was an impermissible death
penalty sanction and prevented a decision on the merits of the case.
Standard of Review and Applicable Law
       A party who fails to make a timely discovery response may not introduce in evidence the
material that was not timely disclosed, unless it makes a showing of good cause and lack of
unfair surprise or prejudice to the opposing party. TEX. R. CIV. P. 193.6(a), (b). However, trial
courts also have the discretionary power to impose other sanctions. See TEX. R. CIV. P. 215.2,
215.3. A discretionary sanction imposed under Rules 215.2 and 215.3 must be just. See id.
215.2, 215.3; TransAmerican Nat. Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991) (orig.
proceeding). Whether a sanction is just is measured by two standards. First, a direct relationship
must exist between the offensive conduct and the sanctions imposed. Powell, 811 S.W.2d at
917. Second, just sanctions must not be excessive. Id. The punishment should fit the crime. Id.
“A sanction imposed for discovery abuse should be no more severe than necessary to satisfy its
legitimate purposes.” Id. Courts must consider the availability of less stringent sanctions and
whether such lesser sanctions would fully promote compliance. Id.
       Sanctions that have the effect of adjudicating a claim or precluding a decision on the
merits of the case are referred to as “death penalty” sanctions. GTE Commc’ns Sys. Corp. v.
Tanner, 856 S.W.2d 725, 732 (Tex. 1993). “Death penalty” sanctions are harsh and may be
imposed as an initial sanction only in the most egregious and exceptional cases.              Cire v.
Cummings, 134 S.W.3d 835, 842 (Tex. 2004). Death penalty sanctions may be imposed in the
first instance only “when they are clearly justified and it is fully apparent that no lesser sanctions
would promote compliance with the rules.” Tanner, 856 S.W.2d at 725. Before imposing a
death-penalty sanction, a trial court must consider whether lesser sanctions would fully promote
compliance. Cire, 134 S.W.3d at 839–40. “Under this standard, the trial court need not test the
effectiveness of each available lesser sanction by actually imposing the lesser sanction on the
party before issuing the death penalty; rather, the trial court must analyze the available sanctions
and offer a reasoned explanation as to the appropriateness of the sanction imposed.” Id. at 840
(citing Spohn Hosp. v. Mayer, 104 S.W.3d 878, 883 (Tex. 2003) (noting that the record should

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“contain some explanation of the appropriateness of the sanctions imposed”)). This standard
does not require a trial court to list each possible lesser sanction in its order and then explain why
each would be ineffective. Id. at 842.
       “The absence of an explanation of how a trial court determined to impose an especially
severe sanction is inadequate.” Citibank, N.A. v. Estes, 385 S.W.3d 671, 676 (Tex. App.–
Houston [14th Dist.] 2012, no pet.).       A trial court must “explain that it considered lesser
sanctions before imposing death penalty sanctions.”          Id.   Even when the record reflects
intentional discovery abuse, the trial court must still explain that it considered lesser sanctions
before imposing sanctions that preclude a party’s ability to present the merits of its claims.
Primo v. Rothenberg, No. 14–13–00794–CV, 2015 WL 3799763, at *24 (Tex. App.–Houston
[14th Dist.] June 18, 2015, pet. denied) (mem. op.). “Thus, a trial court either must impose
lesser sanctions first or must clearly explain on the record why the case is an exceptional case
where it is fully apparent that no lesser sanctions could promote compliance.” Knoderer v. State
Farm Lloyds, No. 06–13–00027–CV, 2014 WL 4699136, at *11 (Tex. App.–Texarkana Sept.
19, 2014, no pet.) (mem. op.).
       Moreover, a conclusory explanation is insufficient. See Tanner, 856 S.W.2d at 729
(giving no deference to unsupported conclusions in the trial court’s order, which stated without
explanation that lesser sanctions would have been ineffective); Associated Air Ctr. LP v. Tary
Network Ltd., No. 05–13–00685–CV, 2015 WL 970664, at *6 (Tex. App.–Dallas Mar. 4, 2015,
no pet.) (mem. op.) (“[T]he sanctions order simply recites, without any further explanation or
analysis, that lesser sanctions were considered but ‘would not promote compliance with the
Texas Rules of Civil Procedure.’ Beyond this general statement and description of the offensive
conduct, the trial court in this case offered no reasoned explanation of the appropriateness of the
sanctions imposed.”).
       Although death-penalty sanctions most often are thought of in the context of striking
pleadings or rendering a default judgment, any sanctions that are case determinative may
constitute death-penalty sanctions, including those that exclude essential evidence. In re RH
White Oak, LLC, 442 S.W.3d 492, 501 (Tex. App.–Houston [14th Dist.] 2014, orig. proceeding)
(emphasis added). For example, in In re Alere Women’s & Children’s Health, LLC, 357
S.W.3d 809 (Tex. App.–Houston [14th Dist.] 2011, orig. proceeding), a nursing-malpractice
action, the trial court struck eight expert witnesses because the relator violated Section 74.351(k)

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of the Civil Practices and Remedies Code by disclosing to these experts a preliminary expert
report filed by the plaintiff. Alere Women’s & Children’s Health, LLC, 357 S.W.3d at 814-15.
The appellate court concluded that the trial court’s striking these expert witnesses amounted to a
death-penalty sanction because all of the experts that relator designated for the purpose of
testifying about negligence and causation had been stricken. Id. at n.1. The appellate court held
that the trial court abused its discretion by not considering lesser sanctions, stating:

        Our review of the record from the December 12, 2011, hearing in this case reveals the court did
        not consider lesser sanctions before imposing death penalty sanctions. The record does not contain
        any explanation of the appropriateness of the sanctions imposed. …. Even if we accepted the real
        party’s contention that relator should not have permitted its experts to review the preliminary
        expert report, the trial court should have considered lesser sanctions to accomplish the same goal
        of prohibiting any reference to the preliminary report.

Id. at 813 (internal citations omitted). The decisions of other courts of appeals likewise have
recognized that the striking of a party’s witnesses may constitute a death-penalty sanction. 1
Analysis
        Ferrellgas contends that the striking of its sole liability expert amounted to a death
penalty sanction. It further urges that the sanction was excessive under the circumstances and
precluded it from presenting its defense. 2              However, while Ferrellgas clearly committed
sanctionable conduct, even assuming the sanction is excessive, we conclude that it did not result
in the rendition of an improper judgment.
        Texas courts have repeatedly held that, where only simple negligence is alleged,
negligent entrustment and respondeat superior are mutually exclusive modes of recovery. See
Rosell v. Cent. W. Motor Stages, Inc., 89 S.W.3d 643, 654 (Tex. App.—Dallas 2002, pet.
denied); Patterson v. E. Tex. Motor Freight Lines, 349 S.W.2d 634, 636 (Tex. Civ. App.—
Beaumont 1961, writ ref’d n.r.e.) (“The theory of negligent entrustment . . . became immaterial
as soon as the stipulation as to the course of employment was made.”). The courts have reasoned
that negligent entrustment and respondeat superior are both means to the same end—making an
        1
           See Revco, D.S., Inc. v. Cooper, 873 S.W.2d 391, 396 (Tex. App.–El Paso 1994, orig. proceeding)
(exclusion of experts in medical-malpractice case requiring expert testimony has a “death penalty” effect); Perez v.
Murff, 972 S.W.2d 78, 82 (Tex. App.–Texarkana 1998, pet. denied) (exclusion of appellants’ undesignated
witnesses precluded them from presenting their case, and thus, constituted a “death penalty” sanction).
        2
          While we do not reach the appropriateness of the severity of the sanction, we note that if Appellants had
brought the background investigation to the trial court’s attention when they discovered it, a lesser sanction may
have been imposed.

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employer liable for the negligence of an employee. See Rosell, 89 S.W.3d at 657. But once
respondeat superior is established, the competence of the employee and the care exercised in his
employment become immaterial. See Estate of Arrington v. Fields, 578 S.W.2d 173, 178 (Tex.
Civ. App.—Tyler 1979, writ ref’d n.r.e.). The employer is liable regardless of whether the
employee is fit and competent. See id.
       On the other hand, where the plaintiff alleged simple negligence against the employee
and gross negligence against the employer for entrusting a vehicle to an incompetent or reckless
driver, “the negligent entrustment cause of action would be an independent and separate ground
of recovery against the owner for exemplary damages.” See Rosell, 89 S.W.3d at 654. The
employer cannot avoid direct liability for exemplary damages by admitting vicarious liability for
compensatory damages. See Williams v. McCollister, 671 F. Supp. 2d 884, 889 (S.D. Tex.
2009); McDorman ex rel. Connelly v. Texas-Cola Leasing Co., 288 F. Supp. 2d 796, 810 (N.D.
Tex. 2003). Therefore, once respondeat superior is established, a negligent entrustment claim is
only material (and viable) to the extent it can be used to recover exemplary damages from the
employer. Main v. Eichorn, No. W-10-CA-00158, 2011 WL 13127650, at *7–8 (W.D. Tex.
Mar. 3, 2011).
       In this instance, the jury did not find Ferrellgas liable for gross negligence.
Pragmatically, whether it be for Smalling’s negligence through respondeat superior, or for its
own direct negligence, Ferrellgas is responsible for the entirety of the simple negligence
judgment. This is especially true because Smalling admitted fault and Ferrellgas attempted to
stipulate liability based on his testimony. It was undisputed at trial that Smalling was acting in
the course and scope of his employment at the time of the accident. Furthermore, Appellants’
counsel conceded at oral argument that Ferrellgas is financially responsible for the entirety of the
judgment. Appellants did not contend Reese was proportionately responsible for the accident. It
matters not whether the jury split the negligence between Smalling and Ferrellgas 50/50, 25/75,
or 100/0. Because the jury did not find gross negligence, the practical effect remains the same
and the direct negligence claims against Ferrellgas are immaterial. Therefore, even if the striking
of Ferrellgas’s lone liability expert was excessive, it did not result in an improper judgment. See
TEX. R. APP. P. 44.1(a).
       And we are not persuaded otherwise by Appellants’ arguments to the contrary.
Appellants urge that Ferrellgas’s direct negligence is not immaterial because Reese pursued

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direct negligence at trial. But as previously discussed, Reese pursued direct negligence as an
avenue toward gross negligence. However, by rejecting the gross negligence theory against both
Smalling and Ferrellgas, the jury rendered Ferrellgas’s direct negligence immaterial.
        Appellants also urge that they would not have been harmed had the trial court ordered a
lesser sanction.      They suggest the trial court could have instructed the jury to disregard
Hedgpath’s testimony that he saw the report of the background investigation. They further posit
that the trial court could have simply adjudicated the fact that the background investigation had
not been performed.          According to Appellants, doing so would not establish Ferrellgas’s
negligence because the jury would still need to find the lack of an investigation caused the
accident.    However, Hedgpath did not testify regarding causation.                     He testified regarding
Ferrellgas’s employment and training practices. Hedgpath’s testimony focused on his opinions
that Ferrellgas complied with the federal motor carrier regulations and adequately trained,
supervised, retained, and hired Smalling. He did not specifically testify whether Ferrellgas’s
actions caused the accident with Reese. Therefore, even if the entirety of Hedgpath’s testimony
had not been struck, but the court instead instructed the jury that no background investigation
had been performed as suggested by Appellants on appeal, it would not have changed the jury’s
verdict. At best, the inclusion of his testimony may have impacted the percentages of liability;
however, as discussed above, the percentages are irrelevant to financial responsibility.
        Appellants further urge that the imposition of sanctions unfairly harmed Ferrellgas’s,
Minton’s and Hedgpath’s reputations. We disagree. Either someone associated with Ferrellgas
or one of its attorneys, including Minton, provided the investigation to Hedgpath. Minton knew
the investigation had been found and failed to disclose it to Reese. 3 The conduct at issue was
clearly sanctionable; it was Ferrellgas’s, Minton’s and Hedgpath’s own actions that damaged
their reputation, not the sanctions. See Haase v. Pearl River Polymers, Inc., No. 14-11-00024-
CV, 2012 WL 4166826, at *6 (Tex. App.—Houston [14th Dist.] Aug. 9, 2012, pet. denied)
(mem. op.).
        For the above reasons, we conclude that any alleged error in excluding Hedgpath’s
testimony is harmless. Thus, we overrule Appellants’ only issue.

        3
          We further note that there is at least circumstantial evidence in the record that Minton knew Hedgpath had
seen the background investigation and set up an avenue for Hedgpath to convey that information conveyed to the
jury through testimony because Minton knew the document could not be offered into evidence.

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                                                   DISPOSITION
         Having overruled Appellants’ sole issue, we affirm the trial court’s judgment.

                                                                             BRIAN HOYLE
                                                                                Justice

Opinion delivered December 21, 2022.
Panel consisted of Worthen, C.J., Hoyle, J., and Bass, Retired J., Twelfth Court of Appeals, sitting by assignment.

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                                   COURT OF APPEALS

      TWELFTH COURT OF APPEALS DISTRICT OF TEXAS

                                           JUDGMENT

                                        DECEMBER 21, 2022

                                         NO. 12-22-00025-CV

                         FERRELL GAS, INC., FERRELL GAS, L.P.,
                              AND MICHAEL SMALLING,
                                      Appellants
                                         V.
                                  MARVEL REESE,
                                       Appellee

                                  Appeal from the 7th District Court
                          of Smith County, Texas (Tr.Ct.No. 18-1652-A)

                       THIS CAUSE came to be heard on the oral arguments, appellate record
and briefs filed herein, and the same being considered, it is the opinion of this court that there
was no error in the judgment.
                       It is therefore ORDERED, ADJUDGED and DECREED that the judgment
of the court below be in all things affirmed, all costs of this appeal are adjudged against
Appellants, FERRELL GAS, INC., FERRELL GAS, L.P., AND MICHAEL SMALLING
and that this decision be certified to the court below for observance.
                    Brian Hoyle, Justice.
                    Panel consisted of Worthen, C.J., Hoyle, J., and Bass, Retired J., Twelfth Court of Appeals,
                    sitting by assignment.

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