Court Opinion

ID: 9772032
Source: CourtListenerOpinion
Date Created: 2023-08-29 17:05:19.734183+00
Date Added: 2024-06-11T07:31:41.688414
License: Public Domain

ENOCH, Justice,
concurring.
I agree that the petition for writ of habeas corpus should be granted in this matter, but for reasons other than those expressed by the Court. Specifically, I disagree with the Court that a corporate agent may be held in contempt of court for the corporation’s violation of an order directed only against the corporation. Because the order did not specifically name Chambers or direct him to take any action on behalf of the corporation, *263the order lacks specificity and cannot support a contempt judgment against Chambers. As the contempt judgment against Chambers is void, I concur in the Court’s judgment granting the petition for writ of habeas corpus.
In this case, the June 24,1993 judgment of contempt (and the order incorporated therein) unambiguously directed that the corporation pay $3,000 to the clerk of the court during the period from June 24th to July 1st. The order did not require the corporation to generate the funds necessary to pay the fine or restrict the transfer of any assets or operations. The order did not include any direction to Chambers or any of the other individual defendants, as had previous orders in the case. The trial court could have directed the actions of the corporation and the individual defendants, but it did not.
A corporation is a separate legal entity, and “[t]he corporate form normally insulates shareholders, officers, and directors from liability for corporate obligations.” Castleberry v. Branscum, 721 S.W.2d 270, 271 (Tex.1987). We disregard the corporate form in only two situations. First, when “the corporate form has been used as part of a basically unfair device to achieve an inequitable result.” Id. In that situation, the corporation is considered the alter ego of the individual, and the two are treated as one. Second, we ignore the corporate form when we hold corporate representatives personally liable for the consequences of their own wrongful acts, even when those acts are performed in the corporation’s name and within the scope of their authority. This exception exists in negligence and criminal law. Leyendecker & Assoc., Inc. v. Wechter, 683 S.W.2d 369, 375 (Tex.1984); TexPenal Code § 7.23. In that situation, the penalties for the wrongful deeds can be imposed on the corporation, the individual, or both.
By determining that the June 24, 1993 judgment of contempt unambiguously ordered Chambers to comply with its terms, the Court has in effect determined that the corporation was Chambers’ alter ego or that he committed a tortious or criminal act. To allow this Court or the trial court to make that determination for the first time in a contempt hearing raises serious questions of whether Chambers was given proper notice of the charges against him before he was subjected to incarceration and a fine.
It is an accepted rule of law that for a person to be held in contempt for disobeying a court decree, the decree must spell out the details of compliance in clear, specific and unambiguous terms so that such person will readily know exactly what duties or obligations are imposed upon him.
Ex parte Slavin, 412 S.W.2d 43, 44 (Tex. 1967). In this case, the trial court failed to issue an order of sufficient scope to sustain its contempt judgment against Chambers; it failed to order Chambers to do or not do anything at all. The initial judgment of contempt, issued in January 1993, rightfully imposed fines on both the corporation and the individual defendants. The June 1993 judgment of contempt, however, was limited to the corporation alone. More than anything else, this omission is responsible for whatever miscarriage of justice would occur by relieving Chambers of the contempt penalties here. We should not distort the substantive law of contempt to remedy such an oversight.
Because I would hold the contempt judgment against Chambers void, I concur in the judgment granting the petition for writ of habeas corpus.