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Hall v. Timmons3/25/1999
Kenny Timmons filed suit against his employer, SiBon Beverage Corporation, for personal injuries. (SiBon does not subscribe to Texas Workers' Compensation .) Timmons' suit also named Robert Hall, chairman of SiBon, claiming alter ego and single business enterprise. Timmons fell from the ceiling at SiBon while attempting to fix a leaky pipe, suffering a herniated disk in his neck. Following surgery for the neck, Timmons was placed in a full body cast. While in that cast, he fell down the steps at his home and incurred a fracture dislocation to his right elbow and a back vertebra. The jury found in favor of Timmons and the trial court entered judgment in accordance with the verdict. Hall and SiBon appeal on numerous issues. We first address Hall and SiBon's no evidence points.
ISSUES OF NO EVIDENCE
Alter Ego
Hall and SiBon claim the trial court erred in overruling the motion for judgment notwithstanding the verdict and in submitting Question 2 to the jury because there was no evidence Hall is SiBon's alter ego. Alter ego is a basis for disregarding the corporate fiction "where a corporation is organized and operated as a mere tool or business conduit of another corporation." Castleberry v. Branscum, 721 S.W.2d 270, 272 (Tex. 1986)(quoting Pacific American Gasoline Co. of Texas v. Miller, 76 S.W.2d 833, 851 (Tex. Civ. App.--Amarillo 1934, writ ref'd)). It applies "when there is such unity between corporation and individual that the separateness of the corporation has ceased and holding only the corporation liable would result in inJustice." Id. (citing First Nat. Bank in Canyon v. Gamble, 134 Tex. 112, 132 S.W.2d 100, 103 (1939)). Alter ego "is shown from the total dealings of the corporation and the individual, including the degree to which . . . corporate and individual property have been kept separately, the amount of financial interest, ownership and control the individual maintains over the corporation, and whether the corporation has been used for personal purposes." Id. (citing Lucas v. Texas Industries, Inc., 696 S.W.2d 372, 374 (Tex. 1984); Gentry v. Credit Plan Corp. of Houston, 528 S.W.2d 571, 573 (Tex. 1975)).
Timmons introduced evidence that all funds for SiBon had been forwarded from Hall's personal operating account. Hall personally approved or denied funds for SiBon. According to SiBon's president, Kenneth Cornett, SiBon's only means of acquiring funds for operation or purchases was to request them from Hall under his line of credit. Hall admitted Cornett was a "passive" president. Cornett testified SiBon was undercapitalized. According to Hall, if he chose not to loan SiBon more money, it had none.
Hall countermanded decisions made by SiBon personnel. Hall admitted that Timmons worked directly for Bill Foster, an employee of Hall, not SiBon. SiBon's registered address is Hall's personal office. SiBon's board meetings were held at Hall's personal office. Hall had a lien on all of SiBon's assets. SiBon wrote checks totaling $75,000 to Dogwood Partners; Hall's partnership in Dogwood entitled him to receive 99% of that amount.
Considering the evidence and inferences tending to support the jury's finding and disregarding all contrary evidence and inferences, we conclude there is some evidence to disregard the corporate fiction on the basis of alter ego. See Wal-Mart Stores, Inc. v. Gonzalez, 968 S.W.2d 934, 936 (Tex. 1998)(citing Continental Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 450 (Tex. 1996)). The evidence, as a whole, rises to the level that would enable reasonable and fair-minded people to differ in their Conclusions and permits the jury's inference that SiBon is Hall's alter ego. See Transportation Ins. Co.
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