Court Opinion

ID: 9674248
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:25:29.293379+00
Date Added: 2024-06-11T18:16:26.354561
License: Public Domain

HIGHTOWER, Justice,
concurring and dissenting.
For the last forty years it has been well settled that the venue statute which allows a foreign corporation to be sued “in any county in which the company may have an agency or representative” requires that such person or entity (1) actually conduct business in the county of suit in a more or less permanent form, (2) possess broad powers from the defendant corporation and reside in the county of suit, (3) possess powers which are discretionary and relate to commercial or business transactions concerning the corporate affairs of the defendant and whose duties and obligations are not merely matters of manual or mechanical execution, (4) possess broad discretionary power to act for the corporation so that it may be said to have a continuing presence in the county of suit, and (5) possess some discretionary power that can be exercised on behalf of the corporation. Confused? You should be. However, the Court does not acknowledge or attempt to clarify these long standing and conflicting “rules.” In fact, the Court has effectively overruled Milligan v. Southern Express, Inc., 151 Tex. 315, 250 S.W.2d 194 (1952) and numerous court of appeals’ decisions without discussion or explanation.
The rules concerning venue should be clearly understandable and be applied in a predictable and consistent manner. By focusing on the perceived evils of forum shopping, the Court has further muddled this already confused area of Texas jurisprudence. By doing so, this Court injects an element of uncertainty into every determination of whether a person or entity is an “agency” or “representative” for section 15.-037 venue purposes. The uncertainty created and perpetuated by the Court’s language, given the significance of this venue rule, is sufficiently disquieting that I cannot join Part V of the Court’s opinion. Thus, I join only in Parts I, II, III and IV of the Court’s opinion.
I.
Ruiz asserted that venue was proper in Starr County under section 15.037 — the foreign coloration provision. Section 15.037 provides, in pertinent part:
Foreign corporations, private or public, joint-stock companies or associations, not incorporated by the laws of this state, and doing business in this state, may be sued in any county in which all or part of the cause of action accrued, or in any county in which the company may have an agency or representative, or in the county in which the principal office of the company may be situated, or, if the defendant corporation has no agent or representative in this state, then in the county in which the plaintiffs or either of them reside.
Tex.Civ.Prac. & Rem.Code Ann. § 15.037 (emphasis added). The parties are in agreement that, if applicable, the “agency or representative” portion of section 15.037 controls. They disagree, however, in regard to whether Conoco had an “agency or representative” in Starr County.
This court considered the “agency or representative” language of the venue statute in Milligan v. Southern Express, Inc., 151 Tex. 315, 250 S.W.2d 194 (1952).1 In Milligan, we stated:
*761It will be admitted that ... the presence in the county of a mere servant, for example, a salaried employee to clean out dirty trailers, does not create there an agency for venue purposes, even though respondeat superior would obviously apply. Conversely, the more or less possession by a resident of the county of a broad power of attorney of the defendant might well make such a person an “agency or representative” even though his high position necessarily involved powers of discretion far beyond those of a servant and therefore similar to those of an independent contractor. And, as before mentioned in connection with subdiv. 9 (“Crime or trespass”), we are dealing here not at all with liability of a principal for tortious conduct of the agent in the county of suit but simply with the matter of whether such an “agency or representative” there exists. It cannot be doubted that these words considered alone have several different legal meanings, and there is no indication in subdiv. 23 that agency in the sense of responsibility of the principal for tortious conduct of the agent was intended. Rather, in our opinion, the statute refers to a situation in which the business of the defendant is, in a more or less regular and permanent form, actually conducted in the county of suit, or one in which a party possessing broad powers from the defendant resides in the county, the one instance being that of “agency” and the other of “representative.”
Id., 250 S.W.2d at 197-98. Milligan further stated that “the power to contract for the principal ... and its regular use in the very name of the principal as the contracting party are certainly the strongest indication that the principal is doing business through an agency.” Id. at 198. Some cases interpreted Milligan as creating two independent standards — an “agency” or a “representative”— either of which is independently sufficient to establish venue. These cases consider an “agency5’ as a situation in which the defendant corporation actually conducts business in the county of suit in a more or less permanent form. They consider a “representative” as a situation in which a party possessing broad powers from the defendant corporation resides in the county of suit. See, e.g., Beef Cattle Co. v. Scott, 613 S.W.2d 318, 322-23 (Tex.Civ.App.-Amarillo 1981, no writ); Crosby v. Safeway Stores, Inc., 568 S.W.2d 412, 413 (Tex.Civ.App.-Texarkana 1978, writ dism’d); Cotton Concentration Co. v. A. Lassberg & Co., 433 S.W.2d 736, 739-40 (Tex.Civ.App.-Eastland 1968, no writ).
Other cases, however, have utilized a single standard generally requiring that the corporate defendant have a servant or agent in the county of suit whose duties and obligations are not merely matters of manual or mechanical execution but are discretionary and relate to commercial or business transactions concerning the corporate affairs of the defendant. See, e.g., Rouse v. Shell Oil Co., 577 S.W.2d 787, 789-90 (Tex.Civ.App.-Corpus Christi 1979, writ dism’d); South Texas Icee Corp. v. John E. Mitchell Co., 449 S.W.2d 786, 788 (Tex.Civ.App.-Corpus Christi 1969, writ dism’d). See generally Clarence Guittard and John Tyler, Revision of the Texas Venue Statute: A Reform Long Overdue, 32 BAYLOR L.REV. 561, 573-74 (1980).
II.
I would reaffirm our holding in Milligan that there are two independent standards for determining whether venue is proper in a certain county under the “agency or representative” provisions of the venue statute. Milligan sets out two situations in which a corporate presence may subject a foreign corporation to venue in a particular county under section 15.037. First, if a foreign corporation has an officer or employee with discretionary powers that can be exercised on behalf of the corporation and that are not merely matters of manual or mechanical execution, the person is a “representative” for section 15.037 venue purposes. Second, if a foreign corporation has no officers or employees in the county of suit, but has another person or entity that performs those same functions by regularly and (more or less) permanently transacting the corporation’s business in the county, that person or entity is an “agency” for section 15.037 venue purposes. In reality, whether this constitutes two independent standards or a single standard is immaterial.
*762The scope of “agency” or “representative” has been described as follows:
As a general rule, an “agency” or “representative” within the meaning of Subdivision 27 [the predecessor to section 15.037] must be more than a mere servant. His duties and obligations must relate to commercial or business transactions having something to do with the corporate affairs of the principal, and must be more than matters of manual or mechanical execution. The term connotes some discretionary power conferred upon the employee.
Rouse v. Shell Oil Co., 577 S.W.2d at 789; South Texas Icee Corp. v. John E. Mitchell Co., 449 S.W.2d at 788. However, a question exists concerning the character of discretionary power necessary to constitute an “agency” or “representative” for section 15.037 venue purposes. Concerning “representative,” Milligan described a situation “in which a party possessing broad powers from the defendant resides in the county....” Milligan, 250 S.W.2d at 198. See generally Clearwater Constructors, Inc. v. Gutierrez, 626 S.W.2d 789, 793-94 (Tex.Civ.App.-San Antonio 1981, no writ). However, Milligan described the “limits” of discretionary power as between a mere servant who does not have the necessary discretionary power (“for example, a salaried employee to clean out dirty trailers”) and an agent with the express power to contract for its principal (“the power to contract for the principal ... and its regular use in the very name of the principal as the contracting party are certainly the strongest indication that the principal is doing business through an agency”). Id. at 197-98. Most courts of appeal state that “agency” or “representative” “connotes some discretionary power conferred upon the employee.” Rouse v. Shell Oil Co., 577 S.W.2d at 789; South Texas Icee Corp. v. John E. Mitchell Co., 449 S.W.2d at 788; General Motors Corp. v. Brady, 477 S.W.2d 385, 391 (Tex.Civ.App.-Tyler 1972, no writ); Amoco Prod. Co. v. Mayer, 540 S.W.2d 353, 356 (Tex.Civ.App.-Beaumont 1976, writ dism’d) (“the person has discretionary power”); Colorado Interstate Gas Co. v. MARCO, Inc., 570 S.W.2d 164, 170 (Tex.Civ.App.-Amarillo 1978, no writ); Delhi Gas Pipeline Corp. v. Lamb, 610 S.W.2d 210, 212 (Tex.Civ.App.-El Paso 1980, writ dism’d). See generally Mid-Continent Life Ins. Co. v. Huston, 481 S.W.2d 943, 945 (Tex.Civ.App.-Houston [1st Dist.] 1972, writ dism’d). Several courts of appeal state that the “essential distinction [between a mere servant and an “agent or representative”] is that the agent or representative be engaged by his principal to perform the contractual relationship with some discretion that can bind his principal and a third party.” South Texas Icee Corp. v. John E. Mitchell Co., 449 S.W.2d at 788; Allis-Chalmers Mfg. Co. v. Coplin, 445 S.W.2d 627, 628 (Tex.Civ.App.-Texarkana 1969, no writ); Colorado Interstate Gas Co. v. MAPCO, Inc., 570 S.W.2d at 170; General Motors Corp. v. Brady, 477 S.W.2d at 391. The commentators also are divided on this question. See 3 William Dorsaneo III, TEXAS LITIGATION GUIDE § 61.03[2][b], at 61-35 (1992) (“It is clear that an agent or representative must be shown to have discretionary power.”); 2 MCDONALD TEXAS CIVIL PRACTICE § 6:20, at 48 (1992) (The term agency or representative “relates to commercial or business transactions, something to do with the corporate affairs of the principal other than matters of manual or mechanical execution. The term connotes some discretionary power_” (quoting Brazos River Transmission Elec. Cooperative v. Vilbig, 244 S.W.2d 266, 268 (Tex.Civ.App.-Dallas 1951, no writ)); Clarence Guittard and John Tyler, Revision of the Texas Venue Statute: A Reform Long Overdue, 32 BAYLOR L.REV. 561, 572 (1980) (“The test seems to be whether the ‘agency or representative’ has broad discretionary power to act for the corporation so that it may be said to have a continuing presence in the county of suit.”).
The court of appeals’ discussion of “agency” or “representative” venue is indicative of the confusion. In determining that venue was improper in Starr County, the court of appeals described the standard or test as follows:
Milligan clearly restricts the parameters of an “agency” determination to circumstances in which “agent” has broad powers or authority to do the company’s business. “Agency” as defined in Milligan is more *763than merely doing business in a particular county. The ordering of supplies or materials in a particular county is not considered as creating an “agency” or “representative,” unless the person ordering the same is clothed with broad powers.
818 S.W.2d at 124 (emphasis in original). The court of appeals also stated that “the employee, in order to be an ‘agent’ or ‘representative’ of the employer for the purpose of venue, must be a resident of the county where suit was filed on the date that suit was filed, unless the business of the defen-dani/employer ‘is, in more or less regular and permanent form, actually conducted in the county of suit.’ ” Id. at 127 (quoting Milligan, 250 S.W.2d at 198). Essentially, the court of appeals utilized a single standard concerning “agency” or “representative” which generally required that the corporate defendant have an employee residing in the county of suit whose duties and obligations included broad discretionary powers.
III.
Other courts of appeal are indicative of the range of discretionary power necessary to constitute an “agency” or “representative” for section 15.037 venue purposes. In Pan American Petroleum Corp. v. Vines, 422 S.W.2d 764 (Tex.Civ.App.-Waco 1968, writ dism’d), the court of appeals considered whether an employee of Pan American Petroleum was an “agency or representative” for venue purposes. The employee was in charge of all operations of Pan American Petroleum in the county including the producing of wells, the keeping of records, and the firing of other employees. The employee was also in charge of a processing plant in the county. The court held that the employee was an “agency or representative” because the employee’s “position was permanent in its character, and the business operated by him was an extensive operation, valuable to defendant, and covered broad powers in carrying on defendant’s business in Van Zandt County.” Id. at 765. In Colorado Interstate Gas Co. v. MAPCO, Inc., 570 S.W.2d 164 (Tex.Civ.App.-Amarillo 1978, no writ), the court of appeals considered whether an employee of Colorado Interstate Gas was an “agency or representative” for venue purposes and held that no “agency or representative” existed. “[TJhere is no direct evidence that any supervisor does, or has the discretionary power to, contract or otherwise bring about any business relationship between CIG [Colorado Interstate Gas] and third parties.” Id. at 170. “[A]ll decisions relative to the preparation of the budget, the hiring and Bring of personnel, the purchase of material of any significant amount, the gas pressure required for operations, the quantity and quality of natural gas transported, the sale of liquids extracted at the local plants, and the maintenance programs are made in Colorado.” Id. at 171.
In Mobil Oil Corp. v. Cook, 494 S.W.2d 926 (Tex.Civ.App.-Amarillo 1973, no writ), the court of appeals considered whether an employee of Mobil Oil was an “agency or representative” for venue purposes. Mobil Oil had a field office with employees “who had authority to make contracts for pulling and working over pumps, repairing pumps, purchasing supplies and other matters concerning production of oil and gas from wells owned by Mobil, although there were limits of $1,000 and $5,000 for which they could contractually bind Mobil.” Id. at 932-33. The court held that the employee was an “agency or representative” because the employee, “with certain limitations, had authority to bind the corporation contractually with third parties in matters pertaining to the production of petroleum, and had considerable responsibilities relating to the company’s commercial and business transactions not normally associated with a mere employer-servant relationship.” Id. at 933. In Champlin Petroleum Co. v. Heinz, 665 S.W.2d 544 (Tex.App.-Corpus Christi 1983, writ ref'd n.r.e.), the court of appeals held that two Champlin employees — who took care of the production from the gas wells including performing mechanical repairs, adjusting flow rates, servicing the compressors and preparing production reports — were not an “agency or representative” for venue purposes.
*764In Delhi Gas Pipeline Corp. v. Lamb, 610 S.W.2d 210 (Tex.Civ.App.-El Paso 1980, writ dism’d), Delhi’s employee was responsible for finding producers with gas for sale, acquiring well data and sending it to Dallas for evaluation, submitting offers to buy gas, making limited changes to offers and negotiating the purchase price within limits set by Delhi. However, the employee did not have discretion to bind Delhi and all contracts were executed in Dallas. The court of appeals held that the employee was an “agency or representative” because the employee’s duties “called for the exercise of judgment and discretion to the extent that he was actually engaged in the conduct of business of the corporation.” Id. at 213. In Amoco Prod. Co. v. Mayer, 540 S.W.2d 353 (Tex.Civ.App.-Beaumont 1976, writ dism’d), there was evidence that Amoco personnel were present at times in the county and that Amoco signs were erected on the land in question. The court of appeals held that the employee was not an “agency or representative” because “none of the testimony identifies any individual as having the kind of discretionary power required by the cases [Milligan and others]....” Id. at 356. In Clearwater Constructors, Inc. v. Gutierrez, 626 S.W.2d 789 (Tex.Civ.App.-San Antonio 1981, no writ), a contract between Clearwater Constructors and the Corps of Engineers required Clearwater to have a superintendent on the site with authority to act for Clear-water and Clearwater’s superintendent used a trailer at the site as his office. The court of appeals held that the employee was not an “agency or representative” because “the evidence does not indicate the nature of duties of ... [the superintendent]” and “there is no evidence that the job site superintendent ... possessed ‘broad powers from the defendant.’ ” Id. at 793. “In the absence of such evidence, it cannot be said that plaintiff established the presence of anyone in Bexar County meeting the Milligan test concerning ‘broad power.’ ” Id. at 793-94.
IV.
I would conclude that venue was proper in Starr County because there is some evidence that Conoco had a “representative” in Starr County for section 15.037 venue purposes. Since the production foreman is an employee, we should consider whether he is a “representative” of Conoco — in other words, whether he has discretionary powers that can be exercised on behalf of the corporation. My review of the record indicates that Conoco has operated production facilities in Starr County since 1940. These facilities included approximately fifty wells and an office at the Rincon Field, at which five people were permanently employed including the production foreman. The production foreman’s authority and duties included final approval authority on invoices subject to a monetary limitation, authority to order parts and services for Conoco within the limitation, supervision of the Rincon Field, and authority to determine whether maintenance was or was not done on the wells. Among other things, the production foreman’s job description stated as follows:
The Production Foreman is accountable for directing daily operations for the assigned area. The incumbent conducts morning and afternoon meetings with subordinates to 1) establish priorities, 2) review and solve operational problems, 3) communicate and plan work, 4) coordinate activities, 5) emphasize safety and 6) provide guidance. The incumbent frequently visits all facilities to inspect for safe working habits and conditions and to insure the operations meet Conoco’s high standards for compliance, safety, housekeeping and productivity. The Production Foreman monitors downtime, well tests, and various other reports to identify, analyze and solve problems for production increases. The incumbent directs the implementation of improvement measures.
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The Production Foreman has the authority to change job assignments of direct subordinates as long as those changes do not involve transfers or promotions/demotions. The incumbent may establish work schedules and authorize overtime. The foreman *765also has authority to transfer equipment within the assigned area and to select vendors, service companies and contractors to perform company work.
There is no question that the production foreman is more than a mere employee and his duties involve more than just matters of manual or mechanical execution. It is equally clear that Conoco has conferred “some discretionary power” upon the production foreman that can be exercised on behalf of the corporation. He had final approval authority on invoices subject to a monetary limitation, authority to order parts and services for Conoco within the limitation, authority to change job assignments of direct subordinates, and authority to select vendors, service companies and contractors to perform company work. This constitutes some evidence (however meager) that Conoco had a “representative” in Starr County for section 15.037 venue purposes.
In its efforts to reach its desired result, the Court states: “While he [the production foreman] did possess a small measure of discretion, he lacked all of the authority of the independent contractor we consider in Milligan.” 868 S.W.2d at 759. Apparently in determining whether a person or entity is an “agency” or “representative” for section 15.037 venue purposes, the person or entity must have all of the authority of the independent contractor in Milligan. In addition, the Court states that “Starr County has nothing to do with this litigation.” 868 S.W.2d at 759. However, Harris County, where the Court is transferring this cause, also has nothing to do with this litigation other than being the location of Conoco’s principal office. In reality, Conoco is forum shopping by seeking to transfer the cause to Harris County. By focusing on its desired result and the perceived evils of forum shopping, the Court has further muddled this already confused area of Texas jurisprudence. By doing so, this Court does a great disservice to the litigants whom we serve and injects an element of uncertainty into every determination of whether a person or entity is an “agency” or “representative” for section 15.037 venue purposes.
For reasons explained herein, I would affirm that portion of the judgment of the court of appeals holding that Javier Ruiz’s suit was not barred by limitations and reverse that portion of the judgment holding that venue was not proper in Starr County and render judgment that venue was proper in Starr County.
DOGGETT, GAMMAGE and SPECTOR, JJ., join in this opinion.
APPENDIX
Feb. 9, 1994.
A separate supplemental dissenting opinion by Justice Doggett impugns the manner in which the Court has decided this case on motion for rehearing, and criticizes the Court for delaying its ruling on that motion. While we do not wish these criticisms to go unanswered, we also do not wish to be drawn into the polemic that is the separate Justice’s regular and distinctive style. To avoid cluttering the Court’s opinion with such matters that have nothing to do with the issues decided, we respond to the separate opinion in this Appendix.
There is nothing in the least irregular in the manner in which the Court has handled respondent’s motion for rehearing in this case. The original opinion and the opinion and dissent on rehearing represent considered views of the legal issues in this case about which there is sincere disagreement.
The separate supplemental dissent accuses the Court of calculated delay in deciding this case and Carrollton-Farmers Branch Indep. Sch. Dist. v. Edgewood Indep. Sch. Dist., 826 S.W.2d 489 (Tex.1992). The latter ease has nothing to do with this one. The accusation is false, unfounded railing.

. Subdivision 23 of article 1995, which was considered in Milligan v. Southern Express, Inc., stated in pertinent part:
Suits against a private corporation, association, or joint stock company may be brought in the county in which its principal office is situated; or in the county in which the cause of action or part thereof arose; or in the county in which the plaintiff resided at the time the cause of action or part thereof arose, provided such corporation, association or company has an agency or representative in such county....
Tex.Rev.Civ.Stat. art. 1995, subdivision 23 (repealed 1983) (emphasis added).