Davis-Lynch, Inc. v. Asgard Technologies, LLC

472 S.W.3d 50, 2015 Tex. App. LEXIS 6648, 2015 WL 3988232
CourtCourt of Appeals of Texas
DecidedJune 30, 2015
DocketNO. 14-13-01112-CV
StatusPublished
Cited by35 cases

This text of 472 S.W.3d 50 (Davis-Lynch, Inc. v. Asgard Technologies, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davis-Lynch, Inc. v. Asgard Technologies, LLC, 472 S.W.3d 50, 2015 Tex. App. LEXIS 6648, 2015 WL 3988232 (Tex. Ct. App. 2015).

Opinions

[57]*57OPINION

Martha Hill Jamison, Justice

A staffing company placed a worker, later discovered to have a criminal history of theft, in a receptionist position at Davis-Lynch, Inc. (DLI). DLI later promoted the worker to head of accounting, and she embezzled millions of dollars. In two issues, DLI challenges the trial court’s grant of summary judgment in favor of appellees Asgard Technologies, LLC; Mangrove, Inc.; Talent Force, Inc.; Phoenix Offshore Services, L.L.C.; Talent Force Technical, L.L.C.; Asgard Resources, LLC; Asgard Resources of Texas, L.L.C.; and Arthur P. Grider (collectively, Asgard). Concluding that DLI raised a genuine issue of material fact regarding whether Asgard knew or should have known that, because of its acts of retaining the employee from year to year without disclosing her criminal record to DLI, the crime (or one like it) might occur, we reverse the trial court’s judgment as to DLI’s negligent retention claim and remand that issue to the trial court for proceedings consistent with our opinion. We affirm the trial court’s judgment in all other respects.

Background

DLI is an oilfield manufacturing company. Pendragon Holding, Inc., Asgard’s predecessor, was a staffing company. In 1986, DLI and Pendragon entered into a “Technical and Manufacturing Services Agreement.” The term of the agreement was for one year, but could be extended by mutual consent. Subsequent agreements were entered into between Asgard and DLI under substantially similar terms, with Asgard assuming the responsibilities of Pendragon. We refer to all relevant versions of these agreements" as “the Agreement.”

DLI outsourced its staffing and certain aspects of its management needs. Asgard or its predecessors provided personnel to DLI “to cover management, liaison, administrative, technical, maintenance, housekeeping, and clerical requirements.” As set forth in the Agreement, Asgard had continuing responsibilities to supervise personnel it placed at DLI and to supervise and operate certain departments, at DLL The personnel placed at DLI by Asgard continued to be Asgard employees even though they, worked at (and under the direction of) DLL In addition, Asgard provided a program manager “responsible for ensuring that operational, technical, and administrative ... requirements are satisfactorily performed.” The ' program manager supervised all personnel placed by Asgard at DLI “in the performance of [Agreement] requirements!” ’ Although DLI directly employed its upper management, Asgard was also to provide certain human resources functions.

Pendragon placed Nancy Moreno at DLI ,as a receptionist.1 In accordance with the staffing arrangement described above, Moreno, at all relevant times, was an employee of Asgard or one of its predecessors. Two years later, DLI promoted Moreno to accounting clerk. Moreno was supervised by Thurman Northam. Nort-ham was injured in a car accident and could not return to work. DLI’s president, Carl Davis,, and vice president, Frank Cole, promoted Moreno to head of accounting. Moreno hired several personnel to work in the accounting department, [58]*58including close relatives. She had access to financial records; was responsible for accounts payable, accounts receivable, preparation of checks, assembling of invoices for approval by Davis; and had access to company credit cards.

Approximately eight years after Moreno’s promotion to head- of accounting, DLI discovered that Moreno had arranged for a DLI copy machine to be delivered to her son’s place of business. DLI terminated Moreno’s employment and then discovered that Moreno had embezzled over $15 million from DLI while she was working in the accounting department. DLI also learned that Moreno had been placed on deferred adjudication in 1995 for misdemeanor theft and convicted of another misdemeanor theft in 1999.

DLI sued Asgard, bringing claims for negligence, breach of fiduciary duty, and breach of contract and seeking damages of $15 million. Additional theories of liability included respondeat superior and the individual liability of appellee Arthur P. Gri-der.

Asgard filed separate traditional and no-evidence motions for summary judgment on similar grounds, contending that Asgard was not negligent in hiring or retaining Moreno because it had no duty to perform criminal background checks under the Agreement or Texas common law, Moreno’s actions were not foreseeable, Asgard was not negligent in supervising Moreno, Asgard’s actions were not the proximate cause of DLI’s damages, there was no breach of contract, Asgard did not breach any fiduciary duty to DLI, and Grider was not individually liable for any alleged wrongdoing of the staffing companies.2 Asgard also argued the affirmative defenses of quasi-estoppel, waiver, limitations, and laches precluded its liability.

DLI responded and moved to strike Gri-der’s affidavit, which was part of Asgard’s summary judgment evidence.3 The trial court denied the motion to strike, granted the traditional motion for summary judgment, and denied the no-evidence motion.4 Asgard subsequently filed a combined traditional and no-evidence motion for summary judgment on DLI’s respondeat supe[59]*59rior claim. The trial court granted that motion without specifying the grounds.

Discussion

In two issues, DLI contends that the trial court erred in granting Asgard’s motions for summary judgment. In its first issue, DLI complains that the trial court erred in granting Asgard’s traditional motion and denying DLI’s motion for reconsideration of the traditional motion because (1) Asgard owed it a fiduciary duty to discover and disclose material facts concerning the criminal backgrounds of Asgard employees placed at DLI; (2) Asgard breached the Agreement by failing to perform background checks; (3) Asgard was negligent in-hiring and retaining Moreno; and (4) Grider is an alter ego of Asgard and thus personally liable. In its second issue, DLI argues the trial court erred in granting Asgard’s no-evidence motion-on the respondeat superior claim because Asgard, as Moreno’s employer, was liable for her actions.

We review de novo the trial court’s grant of summary judgment. See Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.2009). In a traditional motion for summary judgment, the movant has the burden of establishing that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Id. (citing Tex. R. Civ. P. 166a(e)). The nonmovant has no burden to respond to or present evidence regarding the motion until the movant has carried its burden to conclusively establish the cause of action or defense on which its motion is based. State v. $90,235, 390 S.W.3d 289, 292 (Tex.2013). We consider all the evidence in the light most favorable to the nonmovant, crediting evidence favorable to the non-movant if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. See Fielding, 289 S.W.3d at 848.

The evidence raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their conclusions in light of all of the summary-judgment evidence. Goodyear Tire & Rubber Co. v. Mayes,

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Bluebook (online)
472 S.W.3d 50, 2015 Tex. App. LEXIS 6648, 2015 WL 3988232, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davis-lynch-inc-v-asgard-technologies-llc-texapp-2015.