Court Opinion

ID: 3119819
Source: CourtListenerOpinion
Date Created: 2015-10-16 08:29:12.458921+00
Date Added: 2024-06-11T11:53:03.053237
License: Public Domain

Opinion issued January 10, 2013

                                     In The

                              Court of Appeals
                                    For The

                         First District of Texas
                           ————————————
                              NO. 01-11-00488-CV
                           ———————————
                          EVAN TOLEDO, Appellant
                                       V.
              SILVER EAGLE DISTRIBUTORS, L.P., Appellee

                   On Appeal from the 129th District Court
                           Harris County, Texas
                     Trial Court Cause No. 2007-55595

                         MEMORANDUM OPINION

      Appellant, Evan Toledo, challenges the trial court’s summary judgment

rendered against him in his suit against appellee, Silver Eagle Distributors, L.P.
(“Silver Eagle”), for negligence and violations of the Texas Dram Shop Act.1 In

two issues, Toledo contends that the trial court erred in granting Silver Eagle

summary judgment.

      We affirm.

                                   Background

      In his fifth amended original petition, Toledo alleges that the defendants,

Silver Eagle, Frontier Fiesta Association, the Sigma Pi National Fraternity (“Sigma

Pi”), and Aramark University Food Service Cougar Catering (“Aramark”)

provided alcohol to Mario Perez, a bouncer at Frontier Fiesta, an event held at the

University of Houston. Toledo specifically alleges that Perez, while obviously

intoxicated, assaulted him at Frontier Fiesta and Silver Eagle violated the Texas

Dram Shop Act by delivering and providing alcohol “to minors and intoxicated

individuals who subsequently caused injury.” Toledo also alleges that Silver Eagle

was negligent in the hiring, training, and supervision of its employees. Finally,

Toledo alleges that Silver Eagle and the other defendants are “guilty of joint

enterprise” and, thus, “liable for all torts that were committed while acting in the

scope of the enterprise.”

      In its original answer, Silver Eagle generally denied Toledo’s allegations and

asserted that “the incident in question was proximately caused, either solely or

1
      See TEX. ALCO. BEV. CODE ANN. §§ 2.01–2.03 (West 2007).
                                         2
partially,” by third parties and the carelessness and negligence of Toledo. Silver

Eagle also asserted that it was not a “provider” of alcohol as defined in the Texas

Dram Shop Act.2 In its summary-judgment motion, Silver Eagle argued that the

Dram Shop Act did not apply to Silver Eagle because it was a wholesaler and not a

provider of alcohol, and Toledo had presented no evidence of its negligence or

joint enterprise with the other defendants.

      Silver Eagle attached to its motion its Texas Alcoholic Beverage

Commission permit, which was classified as a “General Class B Wholesaler’s

Permit” and a “Private Carrier’s Permit.” It also attached the affidavit of Vince

Tydlacka, a “Team Leader” who supervised Silver Eagle’s deliveries to the

University of Houston. Tydlacka testified that Silver Eagle “is a wholesaler and

distributor of alcoholic beverages” and “not a provider of alcohol.” He explained

that Silver Eagle simply “sells to retailers, who in turn sell directly to consumers,”

and it “does not sell or serve alcoholic beverages directly to consumers.” At

Frontier Fiesta, Tydlacka was personally responsible for receiving orders from

Aramark for kegs of alcohol and bags of ice. The student organizations present at

Frontier Fiesta would purchase beer directly from Aramark, who would then notify

Silver Eagle “of the name and location of the organization where Silver Eagle was

to deliver the beer.” Silver Eagle would then deliver the beer to the specific “tent

2
      See id. § 2.01(1).
                                          3
area” where the organization was located. Tydlacka noted that Silver Eagle’s

employees would spend “no longer than a minute or two” at the organizations’

tents and would “immediately depart[]” the area after delivering the order. Finally,

Tydlacka explained that:

      [N]either I nor any other Silver Eagle employee ever (i) had any
      contact with the purchasers of the alcohol (other than occasionally
      being shown where to specifically deposit the beer), (ii) had any
      contact with the consumers of the alcohol Silver Eagle delivered to
      the various organizations, (iii) had any contact with any persons
      visiting the tent areas to which Silver Eagle delivered the beer, (iv)
      connected a beer keg to dispensing equipment (e.g., a tap) to enable
      the beer to be poured from keg, (v) sold or served alcohol to any
      person, (vi) identified which persons were consuming alcohol, or the
      age or level of intoxication of any persons possibly consuming
      alcohol, (vii) exercised any control over the area where a delivery was
      being made, or (viii) exercised any control over any person at or near
      a tent area where delivery of beer was being made.

      In his response to Silver Eagle’s motion, Toledo asserted that Perez struck

Toledo, “knocked him to the ground,” and “continued beating him” after an

argument as to whether Toledo could enter the Sigma Pi tent. He asserted that

Silver Eagle “took the beer directly to the tents where the beer was consumed

without limit or control or supervision of any kind” and “sold and provided alcohol

directly to the fraternity tent where [Perez] was a bouncer and where he became

intoxicated and assaulted” Toledo.

      Toledo attached to his response the deposition testimony of Tydlacka.

Tydlacka testified in his deposition that the student organizations would place their

                                         4
orders directly with retailer Aramark, which would provide Silver Eagle with an

invoice and direct Silver Eagle as to where to deliver the ordered supplies. He

noted that Silver Eagle “did not sell any product to anyone other than Aramark” at

the event and a Silver Eagle employee would deliver the kegs, beer, ice, and other

supplies directly to the organization’s tent. The extent of any interaction between

Silver Eagle’s employees and a person at the tent area would be to indicate where

to deposit the supplies. Toledo explained that Silver Eagle employees would

simply “drop[]” off the supplies and leave immediately.           In exchange for its

delivery services, Silver Eagle received checks signed by Aramark at the end of the

event.

         Tydlacka further testified in his deposition that before the event, he met with

an Aramark representative to discuss the Frontier Fiesta arrangement. At the

meeting, Tydlacka received information regarding “product,” “times,” and

“locations.” He noted that while Aramark had a license to sell alcohol at the event,

Silver Eagle merely had a license to provide alcohol to Aramark. And Aramark’s

license restricted the times during which it could sell alcohol and Silver Eagle

could deliver alcohol.

         Toledo also attached to his response the deposition of Allisdair McClean,

Aramark’s resident district manager.        McClean testified that prior to Frontier

Fiesta, he met with representatives from the University of Houston and the Frontier

                                            5
Fiesta Association. At this meeting, at which Silver Eagle was not present, the

parties created a “Memo of Understanding” that “outlined what the event was, the

prices and the terms around that.” Silver Eagle had simply provided a “service of

delivering” for Aramark at Frontier Fiesta and other events in the past. And

Aramark would pay Silver Eagle directly for the alcohol orders, with the

University of Houston receiving a percentage of the total food and alcohol sales.

       The trial court granted Silver Eagle’s summary-judgment motion, noting that

its order was interlocutory because Toledo had pending claims against other

parties.   The trial court later entered another “Order Granting Interlocutory

Summary Judgment for Silver Eagle,” specifically ordering that Toledo take-

nothing on “his claim for joint-enterprise.” Toledo later settled his claims against

Frontier Fiesta Association and non-suited his claims against Sigma Pi, Aramark,

and Perez.

                               Standard of Review

       To prevail on a summary-judgment motion, a movant has the burden of

proving that it is entitled to judgment as a matter of law because there is no

genuine issue of material fact. TEX. R. CIV. P. 166a(c); Nixon v. Mr. Prop. Mgmt.

Co., 690 S.W.2d 546, 548 (Tex. 1985); Farah v. Mafrige & Kormanik, 927 S.W.2d
663, 670 (Tex. App.—Houston [1st Dist.] 1996, no writ).

                                         6
      To assert a no-evidence summary-judgment motion, a movant must

specifically assert that there is no evidence of an essential element of the adverse

party’s cause of action or affirmative defense. TEX. R. CIV. P. 166a(i); Sw. Elec.

Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002); Flameout Design &

Fabrication, Inc. v. Pennzoil Caspian Corp., 994 S.W.2d 830, 834 (Tex. App.—

Houston [1st Dist.] 1999, no pet.). Although the non-moving party is not required

to marshal its proof in response, he must present evidence that raises a genuine,

material fact issue on each of the challenged elements. TEX. R. CIV. P. 166a(i). A

no-evidence summary-judgment motion may not properly be granted if the non-

movant brings forth more than a scintilla of evidence to raise a genuine issue of

material fact on the challenged elements. Id.; Spradlin v. State, 100 S.W.3d 372,

377 (Tex. App.—Houston [1st Dist.] 2002, no pet.). More than a scintilla of

evidence exists when the evidence “rises to a level that would enable reasonable

and fair-minded people to differ in their conclusions.” Merrell Dow Pharm., Inc.

v. Havner, 953 S.W.2d 706, 711 (Tex. 1997).         When reviewing a summary-

judgment motion, we assume that all evidence favorable to the non-movant is true

and indulge every reasonable inference and resolve all doubts in favor of the non-

movant. Nixon, 690 S.W.2d at 548–49; Spradlin, 100 S.W.3d at 377.

                                         7
                                Texas Dram Shop Act

      In his first issue, Toledo argues that trial court erred in granting Silver

Eagle’s summary-judgment motion because when Silver Eagle delivered alcohol to

the tent where Perez became obviously intoxicated, Silver Eagle qualified as a

“provider” under the Texas Dram Shop Act.

      The Texas Dram Shop Act imposes civil liability on providers of alcoholic

beverages for damages resulting from the sale or service of alcohol to a person

who is obviously intoxicated. See TEX. ALCO. BEV. CODE. ANN. §§ 2.01–2.03

(West 2007); F.F.P. Operating Partners, L.P. v. Duenez, 237 S.W.3d 680, 683

(Tex. 2007) (explaining history of Texas Dram Shop Act). The Dram Shop Act

reads, in pertinent part:

             Providing, selling, or serving an alcoholic beverage may
             be made the basis of a statutory cause of action under this
             chapter . . . upon proof that:

                    (1)     at the time the provision occurred it was
                            apparent to the provider that the individual
                            . . . was obviously intoxicated to the extent
                            that he presented a clear danger to himself
                            and others; and

                    (2)     the intoxication of the recipient of the
                            alcoholic beverage was a proximate cause of
                            the damages suffered.

TEX. ALCO. BEV. CODE. ANN. § 2.02(b).

                                           8
      Only a “provider,” as defined by the Dram Shop Act, is liable under section

2.02(b). Harris v. Houston Livestock Show & Rodeo, Inc., 365 S.W.3d 28, 32

(Tex. App.—Houston [1st Dist.] 2011, pet. denied); Smith v. Merritt, 940 S.W.2d
602, 605 (Tex. 1997) (noting that section 2.02(b) “creates a statutory cause of

action against commercial providers only”) (emphasis in original); Graff v. Beard,

858 S.W.2d 918, 919 (Tex. 1993) (holding Dram Shop Act applies only to

commercial providers). “Provider” is defined as “a person who sells or serves an

alcoholic beverage under the authority of a license or permit . . . or who otherwise

sells an alcoholic beverage to an individual.” TEX. ALCO. BEV. CODE ANN. §

2.01(1).

      In support of its argument that it did not “provide” alcohol to Perez as

statutorily defined, Silver Eagle relies on Schmidt v. Centex Beverage, Inc., 825
S.W.2d 791 (Tex. App.—Austin 1992, no writ).             In Schmidt, the plaintiff

trespassed onto the grounds of an Austin festival, where a confrontation with the

festival’s volunteers left him with a broken neck. Id. at 792–93. He then brought

suit against the wholesale beer distributors for violations of the Dram Shop Act and

other causes of action, asserting that the defendants had agents at the festival and

“had reason to know alcohol would be consumed to excess at the event.” Id. at

795. The court held that the defendant did not meet the statutory definition of

                                         9
“provider” because it had no duty “to oversee the sale of alcohol to consumers.”

Id.

      Toledo points to Silver Eagle’s permits from the Texas Alcoholic Beverage

Commission as evidence that Silver Eagle qualified as a “provider” because

“liability under the Dram Shop Act is premised upon licensing.” However, at the

time of the incident, Silver Eagle had a General Class B Wholesaler’s Permit and

Private Carrier’s Permit, which statutorily limited its actions to (1) selling beer in

its original container to retailers authorized to sell it and (2) transporting beer to the

retailers. See TEX. ALCO. BEV. CODE ANN. § 20.01 (West Supp. 2012); id. § 42.01

(West 2007). Thus, Silver Eagle’s permit actually restricted it from providing

alcohol directly to Perez, and there is no evidence in the record that Silver Eagle’s

conduct did not comply with the terms of its license.

      Here, as in Schmidt, Silver Eagle acted only as a wholesaler, providing beer

to organizations participating in the Frontier Fiesta based on Aramark’s

instructions. And Tydlacka repeatedly testified that Silver Eagle delivered alcohol

only to the tents, did not have any contact with consumers, did not sell or serve

alcohol to any individuals, and did not have any control over which individuals

were served alcohol. As noted by Toledo in his brief to this Court, Aramark was

“the only licensed provider of alcohol to the public among the Defendants.” And

there is no evidence that Silver Eagle sold or served alcohol directly to Perez, as

                                           10
                                            3
required by the Texas Dram Shop Act.            See TEX. ALCO. BEV. CODE ANN. §

2.01(1).

      We conclude that Toledo presented no evidence demonstrating that Silver

Eagle qualified as a “provider” under the Dram Shop Act. Accordingly, we hold

that the trial court did not err in granting Silver Eagle’s summary judgment on the

ground that it violated the Dram Shop Act.

      We overrule Toledo’s first issue.

                                  Joint Enterprise

      In his second issue, Toledo argues that the trial court erred in granting Silver

Eagle’s summary-judgment motion because he presented “ample evidence” of the

existence of a joint enterprise between Silver Eagle, Aramark, and the Frontier

Fiesta Association.

3
      In support of his argument that he need only prove that Perez demonstrated
      “obvious signs of intoxication” to establish that Silver Eagle is liable under the
      Texas Dram Shop Act, Toledo relies on several cases. However, each case cited
      by Toledo involves defendants who directly served alcohol to individuals, where it
      was undisputed that the defendants were “provider[s]” under the statute. See Fay-
      Ray Corp. v. Tex. Alcoholic Beverage Comm’n, 959 S.W.2d 362, 365, 369 (Tex.
      App.—Austin 1998, no pet.) (upholding revocation of restaurant’s alcoholic
      beverage permit where restaurant waitress served plaintiff alcohol); Bruce v.
      K.K.B., Inc., 52 S.W.3d 250, 256 (Tex. App.—Corpus Christi 2001, pet. denied)
      (holding more than scintilla of evidence existed that restaurant violated Dram
      Shop Act where plaintiffs were served by restaurant’s bartender); Perseus, Inc. v.
      Canody, 995 S.W.2d 202, 207 (Tex. App.—San Antonio 1999, no pet.) (affirming
      jury verdict in favor of plaintiff against nightclub owner where nightclub served
      plaintiff alcohol); Steak and Ale v. Borneman, 62 S.W.3d 898, 902–04 (Tex.
      App.—Fort Worth 2001, no pet.) (holding evidence legally sufficient that
      restaurant violated Texas Dram Shop Act).
                                          11
       A successful claim based on a joint enterprise will make “each party thereto

the agent of the other . . . to hold each responsible for the negligent acts of the

other.” Shoemaker v. Estate of Whistler, 513 S.W.2d 10, 14 (Tex. 1974). To find

a joint enterprise, there must be: (1) an agreement, express or implied, among the

members of the group; (2) a common purpose to be carried out by the group; (3) a

community of pecuniary interest in that purpose; and (4) an equal right to a voice

in the direction of the enterprise. Tex. Dep’t of Transp. v. Able, 35 S.W.3d 608,

613 (Tex. 2000); Shoemaker, 513 S.W.2d at 16–17.

Community of Pecuniary Interest

       In regard to the third factor, Toledo argues that because Silver Eagle,

Aramark, and the University of Houston all benefited from the sales of alcohol,

they shared a “common pecuniary interest.”        Toledo points to the following

testimony from McClean as evidence of the existence a common pecuniary

interest:

       Following your example, the $50-dollar keg would have been sold at
       whatever the rates were outlined in the agreements. Again, Silver
       Eagle would have been paid their $50. The university would have
       been paid, in whichever case that would fall 15 or 10 percent of the
       overall sales. And we obviously are funding the remainder of tax and
       labor and other.

       The Texas Supreme Court has noted that the term “common business or

pecuniary interest” does not mean a “community of pecuniary interest.” St. Joseph

Hosp. v. Wolff, 94 S.W.3d 513, 527 (Tex. 2003). Thus, although two businesses
                                        12
may have a common pecuniary interest in the sale of their products and each may

stand to benefit financially from such a sale, this is different from a “community”

in which the common purpose is shared “without special or distinguishing

characteristics.” Id. at 528; see also Ely v. Gen. Motors Corp., 927 S.W.2d 774,

779 (Tex. App.—Texarkana 1996, writ denied).               As such, a “franchisor,

wholesaler, or supplier usually does not have a ‘community of pecuniary interest’

in the retail sales of its respective franchisees, retailers, or customers.” St. Joseph

Hosp., 94 S.W.3d at 528. Although such entities “stand to benefit financially from

the successful downstream marketing of their goods or services, their interests in

those activities are not held in ‘community’ with the members of the latter.” Id.

      Here, Tydlacka testified that Silver Eagle is “a wholesaler and distributor of

alcoholic beverages.” Silver Eagle’s permit from the Texas Alcoholic Beverage

Commission was classified a “General Class B Wholesaler’s Permit.”               And,

McClean testified that Silver Eagle received payment based on how much beer

Aramark directed it to deliver, and Aramark paid Silver Eagle directly for this

service. When asked about the profit breakdown, McClean testified that Aramark

would “just pay for [the ice and beer] prior like we do with anything else. So there

was not I wouldn’t say a profit sharing. We order a product. We pay whatever the

agreed upon rate is for that.” Later, McClean explained,

      Well, again, I just would say that there’s not a split of profits; so
      maybe I’m getting hung up on that. Regardless of if there’s a profit or
                                          13
      not, we are required as outlined in that Memo of Understanding to pay
      the University “X” percentage.

      So if we made a dollar of profit or we didn’t make a dollar of profit,
      it’s irrelevant to the fact that Silver Eagle is going to get paid their
      $50. And the university is going to receive their commissions for
      whatever those sales would have been.

      Thus, there existed a “special or distinguishing characteristic” as to Silver

Eagle’s and the other defendants’ pecuniary interests. See, e.g., Harris v. Houston

Livestock Show & Rodeo, Inc., 365 S.W.3d 28, 35 (Tex. App.—Houston [1st Dist.]

2011, pet. denied) (holding that although defendant benefitted by receiving portion

of revenues from drink sales, it did not share community of pecuniary interest

when its pecuniary interest was calculated differently from drink provider); Ely,
927 S.W.2d at 779 (stating that court could find “no cases where a . . .

wholesaler/retailer relationship has been determined to create [a] common

pecuniary benefit” and holding that “[w]hen one party is selling vehicles wholesale

to another to sell retail, there is not a pecuniary interest in a common purpose”).

And Toledo presented no evidence that Silver Eagle shared a “community of

pecuniary interests” with the other defendants.

Equal Right to Control

      In regard to the fourth factor, an “equal right to a voice to control the

enterprise,” Toledo asserts that Silver Eagle “admits to having input into the

method and means of accomplishing the purpose of the joint enterprise.”

                                         14
      To establish an equal right to control a joint enterprise, each entity “must

have an authoritative voice or . . . [s]ome voice and right to be heard.” Shoemaker,
513 S.W.2d at 15. This right to control must extend over the same common

purpose in which the parties have a common pecuniary interest. St. Joseph Hosp.,
94 S.W.3d at 529.

      In support of its argument that Toledo failed to provide evidence of an equal

right to control, Silver Eagle cites Triplex Commc’ns, Inc. v. Riley, 900 S.W.2d
716 (Tex. 1995). In Riley, the court held that a radio station was not liable under

the joint enterprise theory for a nightclub’s violations of the Dram Shop Act. Id. at

719. The plaintiff emphasized that the nightclub priced its drinks based on the

radio station’s FM frequency, arguing that this demonstrated control over the

nightclub. Id. However, the nightclub set the drink prices, was “licensed to sell

alcohol, maintained absolute control over the provision of all the drinks,” and was

“best positioned to monitor the amount of liquor that patrons consumed.” Id.

Thus, the court held that there was no evidence of an equal right to control for the

purposes of imposing joint liability. Id.

      Likewise, here, McClean testified that the University of Houston set the

price of beer sold to the organizations through a “Memo of Understanding” at a

meeting with Aramark and the Frontier Fiesta. Silver Eagle was not present at the

meeting. And, like the defendant in Ripley, Tydlacka testified that he was not

                                            15
responsible for determining “whether anybody was or was not intoxicated” or for

monitoring “how much alcohol was being purchased by a particular group or any

individual.” Instead, he testified that Silver Eagle employees would simply “drop[]

off” alcohol at the locations designated by Aramark. And Aramark’s license

dictated the specific times that Silver Eagle should start and stop delivering beer.

      Toledo argues that he established that Silver Eagle had an equal right to

control because Tydlacka testified to meeting with Aramark before the Frontier

Fiesta to determine “details” in how Silver Eagle and Aramark would “work[]

together” at the event.    However, Tydlacka testified that the purpose of that

meeting was limited to “what products [Silver Eagle] was going to bring to the

event” and information pertaining to “product,” “times,” and “locations.”          See

Riley, 900 S.W.2d at 718–19 (holding that there was no evidence of right to control

in Dram Shop claim where there was no evidence that defendants “exercised any

right of control . . . over who was served, admitted, or ejected”). And because the

only written agreement in the present case is the “Memo of Understanding,” which

Silver Eagle did not participate in drafting, there is no evidence of a contractual

right to control the enterprise. Compare Tex. Dep’t of Transp. v. Able, 35 S.W.3d
608, 616 (Tex. 2000) (distinguishing Ripley and upholding jury finding that equal

right to control existed between Texas Department of Transportation and Houston

Metropolitan Transit Authority because contract gave parties an “equal right to

                                          16
control” procedures for transit operations). Thus, Toledo presented no evidence

that Silver Eagle had an “equal right to a voice to control the enterprise” at Frontier

Fiesta.

      Because Toledo presented no evidence on two essential elements of a joint

enterprise, we hold that the trial court did not err in granting Silver Eagle’s

summary-judgment motion on the ground that it was not civilly liable as a joint

enterprise.

      We overrule Toledo’s second issue.

                                     Conclusion

      We affirm the judgment of the trial court.

                                               Terry Jennings
                                               Justice

Panel consists of Justices Jennings, Higley, and Sharp.

                                          17