William Bradley Lentz, Beverly Lentz, Jason Lentz, M.D., and Rebecca Vanlandingham v. Mewbourne Oil Company and Mewbourne Holdings, Inc. ( 2018 )

ACCEPTED
06-18-00008-CV
SIXTH COURT OF APPEALS
TEXARKANA, TEXAS
6/4/2018 4:35 PM
DEBBIE AUTREY
CLERK
Oral Argument Requested
No. 06-18-0008-CV
_____________________________________________
FILED IN
COURT OF APPEALS 6th COURT OF APPEALS
TEXARKANA, TEXAS
for the 6/4/2018 4:35:37 PM
SIXTH DISTRICT OF TEXAS DEBBIE AUTREY
Texarkana, Texas Clerk
_____________________________________________
William Bradley Lentz, Beverly Lentz, Jason Lentz, M.D., and Rebecca
VanLandingham,
Appellants,
v.
Mewbourne Oil Company and Mewbourne Holdings, Inc.,
Appellees.
_____________________________________________
Appeal from the County Court at Law No. 3
Smith County, Texas
Honorable Floyd T. Getz, Judge Presiding
________________________________________
APPELLANTS’ BRIEF
________________________________________
Omar G. Alvarez Collen A. Clark Jeffrey S. Levinger
State Bar No. 24045402 State Bar No. 04309100 State Bar No. 12258300
ogalvarez@ogalvarezlaw.com cclark@clarkmccrea.com jlevinger@levingerpc.com
O.G. Alvarez & Clark & McCrea J. Carl Cecere (of counsel)
Associates, P.C. 3500 Maple Avenue, State Bar No. 24050397
21022 Gathering Oak Suite 1250 ccecere@cecerepc.com
San Antonio, TX 78260 Dallas, TX 75219 Levinger PC
Tel.: 210-354-3900 Tel.: 214-780-0500 1700 Pacific Ave.,
Fax: 800-948-7571 Fax: 214-780-0501 Suite 2390
Dallas, TX 75201
Tel: 214-855-6817
Fax: 214-817-4509
Attorneys for Appellants
IDENTITY OF PARTIES AND COUNSEL
Pursuant to TEX. R. APP. P. 38.1(a), the following is a complete list of all
parties to the trial court’s judgment and the names and addresses of all trial counsel
and appellate counsel.
1. Plaintiffs-Appellants:
William Bradley Lentz, Beverly Lentz, Jason Lentz, M.D., and Rebecca
VanLandingham
2. Counsel for Plaintiffs-Appellants:
Omar G. Alvarez Jeffrey S. Levinger
O.G. Alvarez & Associates, P.C. J. Carl Cecere (of counsel)
21022 Gathering Oak Levinger PC
San Antonio, TX 78260 1700 Pacific Ave., Suite 2390
(Trial and Appellate Counsel) Dallas, TX 75201
(Trial and Appellate Counsel)
Collen A. Clark
Clark & McCrea
3500 Maple Ave., Suite 1250
Dallas, TX 75219
(Trial and Appellate Counsel)
3. Defendants-Appellees:
Mewbourne Oil Company and Mewbourne Holdings, Inc.
4. Counsel for Plaintiffs-Appellees:
David M. Gunn John R. Mercy
Beck Redden LLP MERCY ✯ CARTER, L.L.P.
1221 McKinney Ave., 1724 Galleria Oaks Dr.
Suite 4500 Texarkana, TX 75503
Houston, TX 77010 (Appellate Counsel)
(Appellate Counsel)
i
Leonard Davis Melinda D. Hamm
Fish & Richardson P.C. Cotton, Bledsoe, Tighe &
110 N. College Ave., Dawson P.C.
Suite 1116 P. O. Box 2776
Tyler, Texas 75702 Midland, Texas 79702-2776
(Trial and Appellate Counsel) (Trial and Appellate Counsel)
Thomas W. Paterson Reagan L. Butts
Susman Godfrey L.L.P. Mewbourne Oil Company
1000 Louisiana St., 3620 Old Bullard Rd.
Suite 5100 Tyler, Texas 75701-8644
Houston, Texas 77002-5096 (Trial and Appellate Counsel)
(Trial and Appellate Counsel)
ii
TABLE OF CONTENTS
Identity of Parties and Counsel ...................................................................................i
Index of Authorities ................................................................................................... v
Statement of the Case.............................................................................................. vii
Statement Regarding Oral Argument .................................................................... viii
Issues Presented ........................................................................................................ix
Introduction ................................................................................................................ 1
Statement of Facts and Procedural History................................................................ 2
A. The Mewbourne family of companies maintains an arrangement
under which all workers are considered employees of
Mewbourne Holdings, not subsidiaries like MOC. ............................... 2
B. Lentz is injured while under the direction of Mewbourne
Holdings’ employees. ............................................................................ 5
C. The trial court decides that MOC is entitled to section
408.001(a)’s exclusive-remedy bar, holding that MOC—not
Mewbourne Holdings—is Lentz’s “employer.”.................................... 7
Summary of the Argument....................................................................................... 10
Argument.................................................................................................................. 12
I. Standard of Review........................................................................................ 12
II. The Trial Court Erred in Concluding that MOC Was Entitled to
Summary Judgment on Its Exclusive-Remedy Defense Under
TEX. LABOR CODE § 408.001(a). ................................................................... 14
A. MOC Did Not Conclusively Establish that Lentz Is Its
“Employee” for Workers’ Compensation Purposes. ........................... 15
1. The Mewbourne companies’ arrangement categorizing all
workers as employees of Mewbourne Holdings is a
relevant factor in determining the identity of Lentz’s
statutory employer..................................................................... 17
iii
2. It was Mewbourne Holdings, not MOC, that had the right
to control Lentz and directed his activities at the time of
his injuries. ................................................................................ 27
3. The fact that MOC administered some of the formalities
of Lentz’s employment on Mewbourne Holdings’ behalf
does not conclusively establish MOC was his employer.......... 30
B. Lentz’s Acceptance of Workers’ Compensation Benefits Does
Not Estop Plaintiffs from Denying that MOC Is Lentz’s
Statutory Employer. ............................................................................. 32
Prayer ....................................................................................................................... 35
Certificate of Compliance ........................................................................................ 37
Certificate of Service ............................................................................................... 38
Appendix:
Order Granting Mewbourne Oil Company and Mewbourne
Holdings, Inc.’s Traditional and No-Evidence Motions for
Summary Judgment (CR 1407–08) ........................................................... tab 1
Order Granting Defendants’ Unopposed Motion for Severance and
Entry of Final Judgment (CR 1418–19) .................................................... tab 2
iv
INDEX OF AUTHORITIES
Cases
Alice Leasing Corp. v. Castillo,
53 S.W.3d 433 (Tex. App.—San Antonio 2001, pet. denied) .............................19
Anderson v. Snider,
808 S.W.2d 54 (Tex. 1991) (op. on rehr’g) ......................................................... 14
Casso v. Brand,
776 S.W.2d 551 (Tex. 1989) ................................................................................13
City of Houston v. Clear Creek Basin Auth.,
589 S.W.2d 671 (Tex. 1979) ......................................................................... 13, 14
Coastal Transp. Co. Inc. v. Crown Cent. Petroleum Corp.,
136 S.W.3d 227 (Tex. 2004) ................................................................................14
Exxon Corp. v. Perez,
842 S.W.2d 629 (Tex. 1992) (per curiam) .......................................................1, 19
Haynes v. City of Beaumont,
35 S.W.3d 166 (Tex. App.—Texarkana 2000, no pet.) .................................14, 29
Little v. Delta Steel,
409 S.W.3d 704 (Tex. App.—Fort Worth 2013, no pet.) ............................. 34, 35
Lopez v. Munoz, Hockema & Reed, L.L.P.,
22 S.W.3d 857 (Tex. 2000) ..................................................................................32
Parkchester Holdings, Inc. v. Carrier Corp.,
No. 05-04-00912-CV, 2005 WL 995357
(Tex. App.—Dallas Apr. 29, 2005, no pet.).........................................................13
Pederson v. Apple Corrugated Packaging, Inc.,
874 S.W.2d 135 (Tex. App.—Eastland 1994, writ denied) .................... 17, 23, 24
Pollard v. Hanschen,
315 S.W.3d 636 (Tex. App.—Dallas 2010, no pet.) ............................................12
Port Elevator-Brownsville, L.L.C. v. Casados,
358 S.W.3d 238 (Tex. 2012) ........................................................................ passim
v
Producer’s Chem. Co. v. McKay,
366 S.W.2d 220 (Tex. 1963) ............................................................................1, 19
Roberts v. Davis,
160 S.W.3d 256 (Tex. App.—Texarkana 2005, pet. denied) ....................... 27, 32
St. Joseph Hosp. v. Wolff,
94 S.W.3d 513 (Tex. 2002) ..................................................................... 20, 23, 28
Starnes v. United States,
139 F.3d 540 (5th Cir. 1998) ................................................................................28
Travis v. City of Mesquite,
830 S.W.2d 94 (Tex. 1992) ..................................................................................14
W. Steel Co. v. Altenburg,
206 S.W.3d 121 (Tex. 2006) ................................................................................15
Wingfoot Enters. v. Alvarado, 111 S.W.3d 134 (Tex. 2003)........................... passim
Statutes
TEX. LABOR CODE § 401.011(18) ............................................................................16
TEX. LABOR CODE § 401.012(a)...............................................................................16
TEX. LABOR CODE § 408.001(a)........................................................................passim
TEX. LABOR CODE § 417.001(a)...............................................................................16
TEX. R. CIV. P. 166a(c).............................................................................................14
Other Authorities
RESTATEMENT (SECOND) OF AGENCY § 220(2) ........................................................20
vi
STATEMENT OF THE CASE
Nature of This is a personal injury case in which Plaintiff William
the Case: Bradley Lentz suffered catastrophic injuries while working
on a well that Defendant Mewbourne Oil Company
(“MOC”) operated on the McElroy Ranch in Upton County,
Texas. (CR 22, 1338) Lentz and his family members sued
MOC, its parent company Mewbourne Holdings, Inc.
(“Mewbourne Holdings”), and several other parties for their
negligence in causing his injuries. (CR 2)
Trial Court: Honorable Floyd T. Getz, Presiding Judge of the County
Court at Law Number 3, Smith County, Texas.
Course of MOC and Mewbourne Holdings filed a traditional and no-
Proceedings: evidence motion for summary judgment. They argued that
Plaintiffs could not maintain any claims against Mewbourne
Holdings because it owed no legal duty to Lentz. (CR 99–
101) They also argued that Plaintiffs’ claims against MOC
were barred by the workers’ compensation exclusive-
remedy bar in TEX. LABOR CODE § 408.001(a). (CR 91–98)
Plaintiffs acknowledged in their response that summary
judgment in favor of Mewbourne Holdings was proper, but
argued that MOC had not conclusively proven its
entitlement to section 408.001(a)’s exclusive-remedy bar
because it was Mewbourne Holdings, not MOC, that was
Lentz’s employer at the time of his accident. (Sealed CR 16)
Trial Court’s On December 7, 2017, the trial court granted summary
Disposition of the judgment in favor of the Mewbourne Defendants, ordering
Case: that Plaintiffs take nothing against both MOC and
Mewbourne Holdings. (CR 1407–08 [App. 1]) That ruling
became final on January 4, 2018, when the trial court severed
Plaintiffs’ claims against the Mewbourne Defendants and
rendered final judgment. (CR 1418–19 [App. 2])
vii
STATEMENT REGARDING ORAL ARGUMENT
Appellants respectfully request oral argument. This is an appeal from a take-
nothing judgment that bars Appellants from recovering against MOC, a Texas
oilfield operator, for its negligence in causing William Lentz’s catastrophic injuries,
based on the affirmative defense that workers’ compensation was Appellants’
exclusive remedy. See TEX. LABOR CODE § 408.001(a). Determining whether MOC
is entitled to raise section 408.001(a)’s exclusive-remedy defense requires
evaluation of a lengthy and detailed evidentiary record, and consideration of the
unique way in which the Mewbourne family of companies have structured their
business operations to make Mewbourne Holdings the sole employer of Lentz and
his co-workers. Appellants therefore believe that oral argument will significantly
aid the Court in deciding this case.
viii
ISSUES PRESENTED
I. Did MOC conclusively prove that it is Lentz’s “employer” under the
Workers’ Compensation Act, so as to be entitled to summary judgment under section
408.001(a)’s exclusive-remedy defense, when:
a. The Mewbourne companies maintain an arrangement
categorizing all workers as employees of Mewbourne Holdings,
not MOC and other Mewbourne subsidiaries;
b. It was Mewbourne Holdings, not MOC, that had the right to
control Lentz and directed his activities at the time of his injuries;
and
c. MOC’s only involvement in Lentz’s employment was to
administer certain formalities on Mewbourne Holdings’ behalf?
II. Did Lentz’s acceptance of workers’ compensation benefits estop
Plaintiffs from contending that MOC is not his employer for purposes of section
408.001(a)’s exclusive-remedy defense?
ix
INTRODUCTION
One of the many benefits of doing business in Texas is that companies located
here are generally free to manage their affairs however they choose, including the
arrangements they make for handling their employees. Accordingly, when
companies within a single corporate family share a worker, they have an unfettered
right to decide for themselves which company should be considered that worker’s
“employer.” And generations of Texans have understood that the law will generally
respect these arrangements. See Exxon Corp. v. Perez, 842 S.W.2d 629, 630 (Tex.
1992) (per curiam); Producer’s Chem. Co. v. McKay, 366 S.W.2d 220 (Tex. 1963).
Courts consider these arrangements to be a critical factor, if not necessarily the sole
and exclusive one, in deciding which company ought to bear the legal
responsibilities, and enjoy the legal benefits, associated with being the worker’s
“employer.”
The trial court in this case departed from these time-honored principles. In
particular, it refused to respect just such an inter-company arrangement when it
decided that MOC was entitled to the benefit of 408.001(a)’s exclusive-remedy
defense. This ruling was inconsistent with summary-judgment evidence showing
that only Mewbourne Holdings, and not MOC and its affiliates, was considered
Lentz’s “employer” under the Workers’ Compensation Act. And contrary to the
court’s assumption, nothing would “estop” Plaintiffs from denying that MOC was
1
Lentz’s employer. The court’s summary judgment in favor of MOC must be
reversed.
STATEMENT OF FACTS AND PROCEDURAL HISTORY
A. The Mewbourne family of companies maintains an arrangement
under which all workers are considered employees of Mewbourne
Holdings, not subsidiaries like MOC.
This case arises from the catastrophic injuries that William Bradley Lentz
sustained while working on one of MOC’s wells located on the McElroy Ranch in
Upton County, Texas. (CR 1338–39) MOC is a member of the Mewbourne family
of companies. Members of that corporate family have decided that the workers of
the entire enterprise are to be considered employees of Mewbourne Holdings—and
only Mewbourne Holdings. (Sealed CR 108) Those employees are then farmed out
to Mewbourne Holdings’ subsidiaries, which are considered to be “DBA”s of the
holding company. (Sealed CR 76) They are responsible for day-to-day operations,
but have no employees of their own. (Id.)
Mewbourne representatives have explained this arrangement to others both
inside and outside the Mewbourne family of companies. When the Mewbourne
companies sought to obtain workers’ compensation insurance before Lentz’s
accident in July 2015, their representatives explained this arrangement to York, the
auditor for their workers’ compensation carrier, Starr Indemnity & Liability Co.
(“Starr”). In audit interviews conducted before Lentz’s injury, Mewbourne
2
Holdings’ employees told York that “Insured [Mewbourne Holdings] owns several
other corporations, trusts, and LLC’s. These companies do not have any employees.”
(Sealed CR 58, 108, emphasis added) And Mewbourne reported that several of
MOC’s executives, including Monty Whetstone, Vice-President of Operations, and
Ken Waits, MOC’s CEO, were on Mewbourne Holdings’ payroll. (Sealed CR 11;
RR 11) It supported those representations with payroll records and general ledgers
substantiating the arrangement, making Mewbourne Holdings the sole employer of
all workers in the Mewbourne family of companies. (Sealed CR 58, 114; RR 40–
41)
This arrangement is also reflected in the coverage that the Mewbourne
companies obtained from Starr, which listed Mewbourne Holdings as the sole
“employer” for purposes of the policy and MOC as only an additional “named
insured.” (Sealed CR 147 at 1 (referring to “the employer named in Item 1,”
emphasis added); id. at 129, Information Page (listing “Mewbourne Holdings, Inc.”
in Item No. 1); id. at 148, Named Insured Schedule) Further, in a “Loss Control Site
Survey Evaluation” that Mewbourne representatives completed after the policy went
into effect, they stated that Mewbourne Holdings controlled all operations, and that
MOC was merely a “DBA.” (Sealed CR 59, 76) And after Lentz’s accident,
Mewbourne sent Starr a wage statement, listing Lentz as an employee of
3
“Mewbourne Holdings, Inc.,” not MOC. (Sealed CR 330) Notably, that wage
statement certified that it was accurate under risk of criminal penalty. (Id.)
The arrangement under which Mewbourne Holdings served as the sole
employer was also explained to the workers within the Mewbourne family of
companies. Defendants produced several copies of the workers’ compensation
notices they were required to post under Texas Workers’ Compensation Rule
110.101(e)(1) for each policy period between 2014 and 2016. (Sealed CR 225
[2013–2014 policy], 228 [2014–2015 policy], 231 [2015–2016 policy]) They also
produced copies of a similar notice required by the U.S. Department of Labor’s
Office of Workers’ Compensation Programs. (Sealed CR 234, 236) Each of these
notices identified “Mewbourne Holdings, Inc.” as the statutory “employer,” and
informed employees that they should notify “Mewbourne Holdings, Inc.” in the
event they were injured on the job.
Finally, the arrangement is reflected in communications that Mewbourne
representatives had with the Texas Department of Insurance’s Office of Workers’
Compensation after Lentz’s injuries. In July 2015, Mewbourne Holdings filled out
a report for the Office of Workers’ Compensation informing it of Lentz’s injury—
which was to be provided by his “Employer[]”—in which Mewbourne Holdings
identified itself by its Tax ID number and referred to Lentz as its “employee.”
(Sealed CR 301–02, 332) Although the version of that report in the record is not
4
signed, it must have been transmitted to the Office of Workers’ Compensation,
because in December 2015, a representative from the office wrote back, stating that
it had received the notice of Lentz’s injury and identifying “Mewbourne Holdings”
as Lentz’s employer. (Sealed CR 238)
Accordingly, Mewbourne representatives maintained a consistent stance—to
internal personnel, to Mewbourne’s insurer and insurance auditor, and to state
workers’ compensation administrators—that for all legal purposes, all workers
would be employees of Mewbourne Holdings. Although subsidiaries like MOC had
no employees, they still had a role in day-to-day operations, including administering
certain formalities of employment on behalf of Mewbourne Holdings such as
maintaining employment records, paying wages, providing benefits, and issuing tax
preparation documents. (CR 876, 881, 1292, 1295, 1298, 1300, 1307, 1309) But at
all times, everyone who worked for a Mewbourne subsidiary was actually a
Mewbourne Holdings employee, and the right to control operations—and all
employees—remained solely with Mewbourne Holdings.
B. Lentz is injured while under the direction of Mewbourne Holdings’
employees.
On the day when Lentz was injured, he reported exclusively to employees of
Mewbourne Holdings—because MOC had no employees that he could have reported
to—and he was subject to the exclusive control of Mewbourne Holdings, not MOC.
And when he walked over to a battery to observe the cleaning process on one of
5
MOC’s wells, he was sent by a Mewbourne Holdings employee, his on-site
supervisor, Barrett Smith. (CR 1281)
Before the day of the injury, MOC had engaged Panther Completion Services,
LLC to clean paraffin wax that had built up on the inside of the 8,500-foot wellbore.
(CR 1334–35) Panther’s cleaning process employed a mixture of hydrogen peroxide
and potassium permanganate as a cleaning solution, which is particularly ill-suited
for use around the highly flammable hydrocarbons found in oil wells. (CR 1335–
36) The combination of these ingredients creates a reaction that produces intense
heat and pressure, which may be useful for cleaning away paraffin wax, but also
increases the risk that an explosion will occur. Worse, the reaction has a dangerous
byproduct—it produces extra oxygen that creates a highly flammable atmosphere.
(CR 1336)
While Panther was cleaning the well on the McElroy Ranch, Barrett sent
Lentz over to a nearby battery where he could measure the flow to see if the cleaning
process was working. (CR 1286, 1338) Moments after Lentz arrived at the battery,
an explosion occurred and the wellhead caught fire. (CR 1339) Lentz suffered
second- and third-degree burns over 70 percent of his body. (Id.) He endured more
than 23 months of intensive medical care, incurring over $2,000,000 in medical
expenses. (Id.) He is now blind in both eyes. (Id.) And he can only walk short
distances—and even then, with considerable assistance. (Id.)
6
C. The trial court decides that MOC is entitled to section 408.001(a)’s
exclusive-remedy bar, holding that MOC—not Mewbourne
Holdings—is Lentz’s “employer.”
Lentz and his family members brought suit against Panther, MOC,
Mewbourne Holdings, and several other parties for their negligence in causing the
explosion and his severe injuries. (CR 2) The Mewbourne Defendants filed a
traditional and no-evidence motion for summary judgment. (CR 84) As to MOC,
they made an argument that was directly contradictory to their accounting
arrangements, as well as their representations to employees, insurers, and the
Workers’ Compensation Commission: They claimed that it was MOC, not
Mewbourne Holdings, that was Lentz’s “employer,” and thus it was MOC that was
entitled to the workers’ compensation exclusive-remedy defense in section
408.001(a) of the Texas Labor Code. (CR 91–94) The Mewbourne Defendants
argued that MOC’s assumption of administrative formalities relating to Lentz’s
employment, along with the self-assessments of several Mewbourne workers who
thought they were MOC employees, should be conclusive evidence that Lentz’s
employer was MOC. (CR 92, 866, 867, 1272–73) They also maintained that
Plaintiffs were estopped from claiming otherwise because of Lentz’s acceptance of
workers’ compensation benefits. (CR 96–98)
Yet the Mewbourne Defendants’ position began to change after Plaintiffs
responded to their summary-judgment motion. When confronted with Plaintiffs’
7
response, which laid out the conflicts between the Defendants’ summary-judgment
argument and the evidence of their inter-company arrangement that made
Mewbourne Holdings the sole employer, they ceased claiming that MOC was
Lentz’s sole employer. Instead, at the summary-judgment hearing, they shifted
tactics and conceded that Mewbourne Holdings could be considered Lentz’s
employer. (RR 23-24) But relying on Port Elevator-Brownsville, L.L.C. v. Casados,
358 S.W.3d 238 (Tex. 2012) and Wingfoot Enterprises v. Alvarado, 111 S.W.3d 134
(Tex. 2003), they contended that Lentz’s employment status was consistent with the
dual-employment relationships found in those cases.1 (RR 24, 46) Thus, they
argued, Lentz’s employment by Mewbourne Holdings was shared with MOC, such
that MOC should be entitled to assert the workers’ compensation exclusive-remedy
defense in section 408.001(a).
The trial court granted summary judgment in favor of MOC.2 It articulated
its reasoning during the summary-judgment hearing. There, the court relied on the
same cases as the Mewbourne Defendants. But under its read of “the case law,” the
court concluded that it was required to focus on the facts “on the ground at the work
In the reporter’s record, references to Wingfoot v. Alvaredo are mistakenly transcribed as
1
“Wineberg” or “Soberano.” (RR 36, 42, 46–47)
2
The court also granted summary judgment in favor of Mewbourne Holdings. (CR 1116)
Plaintiffs did not then and are not now contesting that disposition because they acknowledge that
Mewbourne Holdings was Lentz’s employer, and therefore is entitled to the exclusive-remedy
defense.
8
site”—i.e., who was “controlling the means and manner of the workplace”—rather
than the arrangements of “[a] parent company or [a] holding company or anything
like that.” (RR 38, 47–48) And it concluded that the facts “on the ground”
conclusively established that MOC was Lentz’s employer. (CR 47) It further
credited the Mewbourne employees’ self-assessment that they were MOC
employees—despite recognizing that most of these employees had no awareness of
Mewbourne Holdings’ arrangement retaining control over all employees, or any
understanding of the Mewbourne family’s corporate structure. As the court noted,
“whether they have knowledge of holding companies or parent companies” or not
did not render their testimony “incompetent vis-à-vis what’s going on at the well
site.” (RR 39)
The trial court then gave a further reason for ignoring the arrangement
between Mewbourne Holdings and MOC: It credited the testimony of a
representative from Mewbourne’s workers’ compensation insurer, Starr, who
claimed he simply listed Mewbourne Holdings as the “employer” in the policy to
save room on the form. (RR 27–28, 48) Based on these facts “on the ground at the
work site,” the court concluded that “Mewbourne Oil Company” was “the employer
at the time of the accident.” (RR 47–48)
Further, the trial court held that Plaintiffs should be barred from recovering
against MOC based the affirmative defense of quasi-estoppel because Lentz had
9
accepted workers’ compensation benefits, concluding that this was an “additional
ground” to grant summary judgment in favor of MOC. (RR 48)
SUMMARY OF THE ARGUMENT
The trial court erred twice in granting summary judgment for MOC—with
both errors stemming from its decision to ignore the arrangement between MOC and
Mewbourne Holdings that made Lentz solely an employee of Mewbourne Holdings.
For half a century, courts have understood that such inter-company arrangements are
among the best possible evidence of a worker’s employment status, because they
show concretely how the companies plan to divide up the legal burdens and benefits
of employing workers, and demonstrate the companies’ decision-making among
themselves about which entity would have the final say in asserting control over
shared workers. And the trial court’s conclusion that the arrangement was simply for
the convenience of Mewbourne’s insurer is only one possible explanation of some
of the facts. That conclusion ignores Mewbourne Holdings’ own internal accounting
measures, along with numerous representations to employees, the insurance
company and its auditor, and state agencies, all of which demonstrated that the
arrangement reflected the economic realities of Mewbourne’s business: that
Mewbourne Holdings ultimately controls all operations, and subsidiaries like MOC
are merely DBAs with no employees of their own. By picking and choosing among
10
the summary-judgment evidence, crediting the Mewbourne Defendants’ evidence
over Plaintiffs’, the trial court reversibly erred.
The trial court further erred in concluding that the arrangement between
Mewbourne Holdings and MOC had no effect on the “facts on the ground” about
which company had the right to control Lentz. The arrangement at issue made
everyone who worked with Lentz an employee of Mewbourne Holdings, not
MOC—and that includes his direct reports, his supervisors at the job site, and Barrett
Smith, the supervisor who directed him to perform the tasks that led to his
catastrophic injuries.
This result cannot be changed simply because those workers—even Lentz
himself—may have thought they worked for MOC. Under Texas law, such self-
assessments cannot create a right of control where no such right exists. Moreover,
because the workers gave no explanation for their belief that they were MOC
employees, and thus supplied the court with no facts that would help it evaluate the
legal basis for their belief, their testimony was not competent summary-judgment
evidence. And the Mewbourne Defendants provided no other evidence that even
suggested MOC was Lentz’s employer, much less conclusively established that it
was.
Finally, the trial court’s errors in interpreting the summary-judgment evidence
cannot be saved by invoking the affirmative defense of quasi-estoppel. While Lentz
11
indisputably received workers’ compensation benefits for the injuries he suffered,
he received those benefits under a single policy that covered both MOC and
Mewbourne Holdings. Thus, his acceptance of benefits under that policy is not an
admission as to which company—between the two—was his statutory employer.
Lentz’s acceptance of those benefits therefore does not “estop” Plaintiffs from
contending that Mewbourne Holdings is his statutory employer, and the authorities
Defendants relied on to support their estoppel argument are inapposite.
ARGUMENT
I. Standard of Review.
Because the Mewbourne Defendants moved for traditional summary
judgment based on their affirmative defenses of exclusive-remedy and quasi-
estoppel, they are in the same position as a plaintiff seeking summary judgment on
multiple claims.3 Pollard v. Hanschen, 315 S.W.3d 636, 638–39 (Tex. App.—
Dallas 2010, no pet.). The inquiry on appeal is the same as the inquiry at trial—
whether Defendants met their burden of expressly presenting and conclusively
proving “all essential elements” of one or more of their affirmative defenses “as a
3
The Mewbourne Defendants’ summary-judgment motion also raised no-evidence points.
(CR 103) But the only no-evidence points concerned the Plaintiffs’ claims against Mewbourne
Holdings, which are not at issue in this appeal. Accordingly, the only relevant standard of review
is the one governing a traditional summary-judgment motion.
12
matter of law.” City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678
(Tex. 1979); see also Casso v. Brand, 776 S.W.2d 551, 556 (Tex. 1989).
The burden of raising genuine issues of material fact did not shift to
Plaintiffs—meaning that they had no burden to respond—unless and until
Defendants first met their initial burden. Casso, 776 S.W.2d at 556; City of Houston,
589 S.W.2d at 678. Accordingly, on appeal, Plaintiffs can raise complaints that “the
grounds expressly presented to the trial court by the movant’s motion are insufficient
[a]s a matter of law to support the summary judgment,” regardless of the grounds
for denying the motion that Plaintiffs presented to the trial court. City of Houston,
589 S.W.2d at 678. Moreover, even if Defendants met their initial summary-
judgment burden, the summary judgment against Plaintiffs still must be reversed if
genuine issues of material fact exist on MOC’s exclusive-remedy and quasi-estoppel
affirmative defenses. Torres v. Western Cas. & Sur. Co., 457 S.W.2d 50, 52–53
(Tex. 1970).
In determining whether material fact issues exist, a court must indulge every
reasonable inference in favor of Plaintiffs and resolve any doubts in their favor.
20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). The appellate court may
consider “only the evidence before the trial court at the time of the summary
judgment motion hearing.” Parkchester Holdings, Inc. v. Carrier Corp., No. 05-04-
00912-CV, 2005 WL 995357, at *2 (Tex. App.—Dallas Apr. 29, 2005, no pet.).
13
Only issues expressly presented to the trial court by written motion, answer, or other
response may be considered on appeal. TEX. R. CIV. P. 166a(c); City of Houston,
589 S.W.2d at 677. And “summary judgment cannot be affirmed on a ground not
specifically presented in the motion for summary judgment.” Travis v. City of
Mesquite, 830 S.W.2d 94, 100 (Tex. 1992).
Conclusory evidence—that which “does not provide the underlying facts to
support the conclusion”—is incompetent summary-judgment evidence. Haynes v.
City of Beaumont, 35 S.W.3d 166, 178 (Tex. App.—Texarkana 2000, no pet.);
Anderson v. Snider, 808 S.W.2d 54, 55 (Tex. 1991) (op. on rehr’g). Such evidence
is substantively defective, is insufficient to eliminate fact issues, and amounts to no
evidence to support a summary judgment. See Coastal Transp. Co. Inc. v. Crown
Cent. Petroleum Corp., 136 S.W.3d 227, 232–33 (Tex. 2004).
II. The Trial Court Erred in Concluding that MOC Was Entitled to
Summary Judgment on Its Exclusive-Remedy Defense Under TEX.
LABOR CODE § 408.001(a).
The central flaw in the trial court’s grant of summary judgment stems from its
failure to recognize the relevance of the arrangement under which Mewbourne
Holdings is considered the sole employer for all workers in the Mewbourne family
of companies. That arrangement is critical in understanding Lentz’s employment
status—which is based on evidence of a right to control that courts are bound to
respect, and juries are required to consider, in evaluating any question regarding a
14
worker’s employment status. The trial court’s disregard of that arrangement also
caused it to misread the “facts on the ground” by overlooking the practical
consequence of that arrangement: Only Mewbourne Holdings had the right to
control Lentz, because only Mewbourne Holdings had employees capable of
controlling Lentz. Compounding these errors, the court considered the Mewbourne
Defendants’ evidence to be conclusive even though it not only conflicted with the
controlling arrangement, but also relied on conclusory, incompetent, and made-for-
litigation opinions that cannot support the summary judgment in favor of MOC.
A. MOC Did Not Conclusively Establish that Lentz Is Its “Employee”
for Workers’ Compensation Purposes.
Under the workers’ compensation system in Texas, companies that subscribe
to approved workers’ compensation insurance plans are entitled to immunity from
any tort claims that their workers might assert against them for workplace injuries.
TEX. LABOR CODE § 408.001(a) (providing that workers’ compensation benefits are
“the exclusive remedy” for an injured employee covered by workers’ compensation
insurance). But subscribing to a workers’ compensation plan is only one of the
requirements a company must meet to obtain this exclusive-remedy bar. As the
Mewbourne Defendants admitted in the court below, the company must also prove
that “it was the workers’ employer within the meaning” of the Texas Workers’
Compensation Act. (CR 91, citing W. Steel Co. v. Altenburg, 206 S.W.3d 121, 123
(Tex. 2006)).
15
Only those companies that meet the statutory definition of “employer” receive
this immunity.4 Injured workers remain free to sue any other “third party” that
“becomes liable” for the workers’ injuries. TEX. LABOR CODE § 417.001(a). And
that is true whether the third party is a co-worker, an independent contractor, or—as
Defendants have admitted (CR 99–100 & n.10)—a parent or subsidiary of the
company that subscribed to the workers’ compensation policy. Indeed, it makes no
difference whether the third party maintains workers’ compensation coverage for its
own employees, because maintaining such coverage is only one of the requirements
for obtaining the workers’ compensation exclusive-remedy bar.
Thus, in order to obtain summary judgment on its affirmative defense that
workers’ compensation was Plaintiffs’ exclusive remedy, MOC had to conclusively
demonstrate that it was Lentz’s employer for workers’ compensation purposes. But
it did not and cannot meet that burden. In this case, the evidence produced in
discovery demonstrates that only one of the Mewbourne Defendants can meet the
statutory definition of “employer.” And it is not MOC, as the Mewbourne
Defendants maintain. It is Mewbourne Holdings.
4
See TEX. LABOR CODE § 401.011(18) (defining “employer” as “a person who makes a
contract of hire, employs one or more employees, and has workers’ compensation insurance
coverage”); id. § 401.012(a) (defining “employee” as “each person in the service of another under
a contract of hire, whether express or implied, or oral or written”).
16
The Mewbourne Defendants and Plaintiffs both agree that the touchstone in
that inquiry is “control”: Determining the identity of Lentz’s employer requires an
evaluation of which company had the “right to control [Lentz] at the time of [his]
injury.” (CR 91–92, quoting Pederson v. Apple Corrugated Packaging, Inc., 874
S.W.2d 135, 137 (Tex. App.—Eastland 1994, writ denied)). And Mewbourne
Holdings’ exclusive right of control over Lentz is shown in two separate ways—
both traceable to the arrangement between Mewbourne Holdings and its
subsidiaries, including MOC.
1. The Mewbourne companies’ arrangement categorizing all
workers as employees of Mewbourne Holdings is a relevant
factor in determining the identity of Lentz’s statutory
employer.
Long before this lawsuit was filed, the Mewbourne Defendants decided that,
between the two of them, Mewbourne Holdings rather than MOC would satisfy the
statutory definition of “employer.” That was true both for Mewbourne workers
generally and for Lentz specifically, because Mewbourne Holdings is the only true
operating company and MOC is merely a “dba” with no employees. While it might
be considered unorthodox for a holding company to be considered the employer, it
is a role that the Mewbourne Defendants’ attorneys embraced at the summary-
judgment hearing—where they acknowledged that Mewbourne Holdings could be
considered Lentz’s employer. (RR 23–24, 46) And it is an arrangement that is
supported by ample summary-judgment evidence.
17
Specifically, the accounting records and payroll ledgers presented to the
Mewbourne companies’ insurance auditor demonstrate that their businesses were
structured consistent with the arrangement that Mewbourne Holdings was the sole
employer of all the workers in the Mewbourne family of companies. (CR Sealed
CR 58, 114; RR 40–41) The evidence also shows that the Mewbourne Defendants
communicated a repeated and consistent message about that arrangement to the
workers’ compensation insurer, to the workers, and to the Texas Workers’
Compensation Commission. The Mewbourne Defendants made these
representations about their inter-company arrangement while performing acts
governed by the Workers’ Compensation Act—obtaining approved workers’
compensation coverage, satisfying workers’ compensation regulatory requirements,
and providing workers’ compensation benefits to Lentz. The context of these acts
makes clear that the Mewbourne Defendants were referencing the statutory
definition of “employer” under the Worker’s Compensation Act, not merely some
non-technical layperson’s notion of the term, when they identified Mewbourne
Holdings as the sole employer. The Plaintiffs’ evidence of this arrangement—made
and recorded by the Mewbourne Defendants themselves—provides the only
18
competent, relevant evidence of the identity of Lentz’s “employer” under the
statutory definition—and the only evidence of “control.”5
Under the common law, courts have considered inter-company arrangements
like the one here to be one of the most important factors in determining the identity
of a worker’s employer—including in workers’ compensation cases—as long as they
reflect the economic reality of the companies’ employment relationships. See, e.g.,
Perez, 842 S.W.2d at 630 (holding that an agreement that one company had a right
to control an employee “is a factor to be considered” in determining the identity of
the employee’s statutory employer under the Workers’ Compensation Act). Indeed,
such arrangements were once considered to be conclusive in determining the identity
of the employer. See Producer’s Chem., 366 S.W.3d at 225; see also Alice Leasing
Corp. v. Castillo, 53 S.W.3d 433, 440–41 (Tex. App.—San Antonio 2001, pet.
denied). And even though “assignment[s] of the right to control” between companies
are no longer considered “dispositive”—at least when there is “conflicting evidence
5
The reporter’s record suggests that at one point during the summary-judgment hearing,
Plaintiffs’ counsel could not identify specific evidence “indicat[ing] that Mewbourne Holdings,
Inc., had the right to control” Lentz. (RR 44) In context, counsel appeared to be suggesting that
there was no direct documentary link between Mewbourne Holdings and Lentz; this comment
came up in discussion about Lentz’s employment application with MOC, and counsel indicated
that Defendants had not produced any similar information for Mewbourne Holdings during
discovery. (RR 43) Any spur-of-the-moment imprecision in counsel’s statement does not negate
or affect Plaintiffs’ evidence of Mewbourne Holdings’ control, especially when counsel elsewhere
outlined Defendants’ representations to the “Department of Insurance, Worker’s Compensation
Division and their own carrier, Starr,” and argued that this evidence demonstrated Mewbourne
Holdings’ “right of control” over Lentz. (RR 34, 43-44)
19
as to which entity” has the right of control—such arrangements are still a relevant
factor in the determination of which entity is the employer. St. Joseph Hosp. v.
Wolff, 94 S.W.3d 513, 544 n.92 (Tex. 2002). Thus, where such conflicting evidence
exists, the arrangement is not disregarded as irrelevant—the determination is
properly “left to the jury.” Id.
This makes perfect sense. Evidence of such arrangements is far superior in
demonstrating control than other, more indirect indicia that are considered in
determining whether a right to control exists—such as which company pays the
worker or provides the instrumenalities for the job. See RESTATEMENT (SECOND) OF
AGENCY § 220(2). Such arrangements provide direct evidence about how the
companies themselves treat their employees and how they manage their day-to-day
affairs, and are thus are superior to other indicia from which such control can only
be inferred.
Notably, neither the trial court nor the Mewbourne Defendants offered any
legally sound reason to justify disregard of the arrangement making Mewbourne
Holdings the sole employer. While the trial court relied on Port Elevator, 358
S.W.3d 238, and Wingfoot, 111 S.W.3d 134, to suggest that evidence about the “facts
on the ground at the work site” should be considered to the exclusion of the inter-
company arrangement at issue, neither case actually supports that notion. (RR 39)
Both cases dealt with materially different factual circumstances, involving
20
arrangements under which staffing agencies lease their employees to other
companies, which in turn exercise control over the details of the employees’ work.
And they stand for the unremarkable proposition that it is possible in such dual-
employer situations for multiple companies to assert the workers’ compensation bar
for a single worker. Port Elevator, 358 S.W.3d at 242 (holding that “[a]n employee
may have more than one employer within the meaning of the TWCA, and each
employer who subscribes to workers’ compensation insurance may raise the
exclusive-remedy provision as a bar to claims about the injury.”); Wingfoot, 111
S.W.3d at 134–35 (holding that there may be two employers, for purposes of the
exclusive-remedy provision of the Workers’ Compensation Act, when the provider
of temporary workers furnishes a worker to a client that controls the details of the
work at time the worker is injured). Accordingly, neither case does anything to
undermine the 60 years of Texas precedent establishing the relevance of inter-
company arrangements in determining the identity of a worker’s statutory employer.
Indeed, both cases actually reaffirm the relevance of those arrangements. In
Wingfoot, the Court explained that the employment status of a staffing-company
worker could be affected by an “agreement between the provider of temporary
workers and the client regarding workers’ compensation coverage.” 111 S.W.3d at
144. Similarly, Port Elevator implicitly recognized that such arrangements can
affect employment status because it imposed limits on them—specifically, that
21
companies could not enter into arrangements that would circumvent the rule
prohibiting employers from splitting their workforces (i.e. maintaining coverage for
some employees but not for others). 358 S.W.3d at 243. But those limits are not
applicable to the employment arrangement here.
Furthermore, the facts establishing dual employment in those cases are very
different from the facts here. In both cases, the evidence of control by each employer
was so strong as to go unchallenged by the plaintiffs. Id. at 242 (“[T]he parties agree
that Casados was an employee of both Staff Force and Port Elevator….”); Wingfoot,
111 S.W.3d at 138 (“Alvarado concedes she is Tandem’s employee for some
purposes.”). The only question in each case was whether such dual-employment
relationships were recognized under the Labor Code, and in each case, the Court
answered that question in the affirmative.
In this case, however, that issue is irrelevant because the trial court did not
recognize the existence of any dual-employer situation. And the arrangement
between MOC and Mewbourne Holdings does not suggest dual employment.
Rather, that arrangement allows for only a single employer: Mewbourne Holdings,
because the evidence shows that all workers in the Mewbourne family are employees
of Mewbourne Holdings, and MOC has no employees of its own. In fact, if there is
any uncertainty about whether a dual-employer situation exists, that does not render
irrelevant the evidence contradicting any such dual-employer situation. It simply
22
makes the conflict between that arrangement and the “facts on the ground” a genuine
issue of fact that should be “left to the jury.” St. Joseph, 94 S.W.3d at 544 n.92.
Accordingly, the trial court erred in concluding that Port Elevator and Wingfoot
somehow precluded it from considering the arrangement between MOC and
Mewbourne Holdings in determining the identity of Lentz’s employer.
To be sure, the Mewbourne Defendants disputed the relevance of the
arrangement making Mewbourne Holdings the employer. In particular, they
suggested that the Eastland Court of Appeals’ decision in Pederson signaled that the
law had somehow changed to make evidence of such arrangements irrelevant. (CR
94) But Pederson signals no such change—nor could it, given the Supreme Court’s
reaffirmation of the relevance of similar arrangements in Port Elevator and
Wingfoot. The Mewbourne Defendants also pointed out that the injured worker in
Pederson relied on a “Payment of Compensation” claim form that identified “Staff
Benefits, Inc.” as the relevant “insured” and “employer”—a form they likened to the
evidence of their inter-company arrangement. (CR 94) And they emphasized that
Pederson rejected the relevance of that claim form when it held that “[t]he evidence
conclusively demonstrates” that the workers’ nominal employer, Apple Corrugated
Packaging, “had the right to control” the injured worker. (Id., quoting 874 S.W.2d
at 137, emphasis in motion).
23
The Mewbourne Defendants are correct that Pederson rejected the relevance
of the “Payment of Compensation” claim form, but the court did so for reasons that
are not helpful to them here. Importantly, the injured worker in Pederson did not
offer the claim form as evidence that Staff Benefits was actually her “employer”—
indeed, she did not rely on the fact that the claim form listed Staff Benefits as the
“employer” at all. Instead, she conceded that Apple Corrugated Packaging was her
employer and had the right to control her, which is why the court found the evidence
“conclusively demonstrated” that Apple Corrugated Packaging satisfied the second
requirement for the exclusive-remedy bar. 874 S.W.2d at 136–37. The plaintiff
actually relied on the claim form only to refute the first requirement for the bar: She
contended that because Staff Benefits, not Apple Corrugated Packaging, was listed
as the “insured” on the claim form, that meant Apple Corrugated Packaging did not
have “workers’ compensation insurance coverage.” Id. at 137. But the court
rejected her argument because Apple Corrugated Packaging established that it did
have workers’ compensation insurance—it simply carried that coverage through “an
‘arrangement’” with Staff Benefits. Id. And that holding has no bearing on this
case, where the first requirement is not at issue and where the Mewbourne
Defendants’ own representations disprove their argument that MOC is Lentz’s
“employer” for purposes of the second requirement. Thus, Pederson gave the court
24
below no basis for disregarding Plaintiffs’ evidence of the arrangement that made
Lentz solely an employee of Mewbourne Holdings.
Nor, for that matter, did the Mewbourne Defendants conclusively negate
Plaintiffs’ evidence of Mewbourne Holdings’ arrangement with its subsidiaries like
MOC. The Mewbourne Defendants offered the testimony of their corporate
representative, Drew Greene, who claimed that Mewbourne Holdings, rather than
MOC, is actually the shell—that it is “solely a holding company” with no employees
of its own. (CR 88, 109) But because Greene’s made-for-litigation opinion conflicts
with Defendants’ previous representations to the workers’ compensation insurer, the
insurer’s auditor, and to the State of Texas about how the Mewbourne companies
had structured their employment affairs, it can only create an issue of fact for the
jury to resolve. Thus, Greene’s testimony cannot provide a basis to uphold the
summary judgment in MOC’s favor.6
Similarly, the testimony of a single representative from Mewbourne’s
workers’ compensation insurer—Les Lappe—does not conclusively support the
Defendants’ argument that Mewbourne Holdings was designated as employer
6
Defendants insist that some of the representations they made evidencing the arrangement
were made by mistake, or were made by Starr without Defendants’ input. (E.g., CR 291, 353)
Indeed, Defendants even sought—after Plaintiffs filed their summary-judgment response—to
revise some of these representations to designate MOC, rather than Mewbourne Holdings, as
Lentz’s statutory employer. But Defendants did not try to challenge or correct all of their
representations, many of which have remained unchanged for several years. And in any event, a
jury could reasonably find that the revisions reflect litigation strategy rather than economic reality.
25
merely for convenience. (RR 27–28, 48) For one thing, Lappe’s testimony pertained
only to the decision to list Mewbourne Holdings as the “employer” in the workers’
compensation insurance policy. (RR 27–28) His testimony does not—and cannot
—negate Mewbourne’s numerous other representations outside the policy, made by
Mewbourne representatives with personal knowledge of the Mewbourne companies’
operations, who claimed that all workers were employees of Mewbourne Holdings.
Nor can it undermine the evidence proving the truth of the economic reality behind
those representations: that Mewbourne Holdings controlled all operations, and that
its subsidiaries were merely “DBA[s]” of the holding company that “do not have any
employees.” (Sealed CR 108) Accordingly, the trial court erred by giving conclusive
weight to one piece of information that was too incomplete and inconsistent to serve
as a basis for granting summary judgment in MOC’s favor.
Finally, to the extent any of the Defendants’ counterveiling evidence should
carry any weight in determining the identity of Lentz’s employer, it cannot negate
the Plaintiffs’ evidence of the arrangement making Mewbourne Holdings the sole
employer of Lentz. At best, Defendants’ evidence only makes the picture more
murky, and raises fact issues for a jury to resolve. Accordingly, at the very least,
Plaintiffs’ evidence of the arrangement between Mewbourne Holdings and MOC
raised a genuine issue of material fact that Mewbourne Holdings—and only
Mewbourne Holdings—was Lentz’s employer. And that evidence precluded the
26
grant of summary judgment in MOC’s favor on the exclusive-remedy defense.
Roberts v. Davis, 160 S.W.3d 256, 261 (Tex. App.—Texarkana 2005, pet. denied)
(holding that genuine issues of material fact precluded summary judgment on
defendants’ limitations defense).
2. It was Mewbourne Holdings, not MOC, that had the right to
control Lentz and directed his activities at the time of his
injuries.
A second, more practical consequence of the arrangement between
Mewbourne Holdings and its subsidiaries is that it made every worker who served
MOC an employee of Mewbourne Holdings, whether they knew it or not. That
means everyone to whom Lentz reported—Barrett Smith, his on-site supervisor,
Monty Whetstone, the Vice-President of Operations, and Ken Waits, the President
and CEO—were Mewbourne Holdings employees. (RR 11) Thus, every person
with the right to control Lentz’s activities was a Mewbourne Holdings employee.
And it was a Mewbourne Holdings employee who also had actual control over
Lentz’s activities at the time of his injuries, because it was Barrett Smith who ordered
him to go over to the battery to see if the tank-cleaning process was working, thus
bringing him within the blast radius of the explosion. (CR 1286; RR 11) By
contrast, MOC had no right to control Lentz at all, because it had no employees who
could control him. And that means the control “on the ground” rested exclusively
with Mewbourne Holdings, not MOC.
27
In similar situations, cases applying Texas law have held that a company could
not be considered the employer of a worker who was under the sole direction of
another employer’s agents. Thus, in St. Joseph, the Texas Supreme Court held that
a teaching hospital was not the employer of a resident who was supervised by
physicians who worked for a foundation, because the resident “was subject to the
Foundation’s direction and control as to the details of his patient treatment while he
was on rotation” at the teaching hospital. 94 S.W.3d at 542. And in Starnes v.
United States, 139 F.3d 540, 542 (5th Cir. 1998), the Fifth Circuit Court of Appeals
relied on the fact that a military doctor’s supervising physicians were independent
contractors of a hospital as one reason to hold that doctor was not a borrowed servant
of the hospital. Applied here, these cases support Plaintiffs’ argument that MOC
could not be Lentz’s employer because the individuals who directed him were
employees of Mewbourne Holdings, not MOC.
In concluding otherwise, Defendants and the trial court both relied on the
testimony of a number of individuals who believed they were MOC employees, and
based on that belief, asserted that Lentz was also an MOC employee. (CR 92) But
none of this testimony actually established MOC’s right of control over Lentz.
Several of these individuals admitted that they knew nothing about Mewbourne
Holdings or the corporate structure adopted by the Mewbourne family of companies.
(CR 347–48, 352) Thus, they could not competently testify about how those
28
companies allocated employees for workers’ compensation purposes. And none of
them offered any facts to show how MOC supposedly controlled Lentz, or stated the
factual basis for their conclusory belief that Lentz was an MOC employee. Indeed,
from the bare testimony of these witnesses, it is impossible to tell whether they were
using the Workers’ Compensation Act’s definition of “employer” or taking into
account the relevant factors that go into determining the identity of an employer.
Accordingly, despite what the trial court concluded, this testimony consists of
nothing but bare legal opinions, and it is insufficient to support a grant of summary
judgment for MOC. Haynes, 35 S.W.3d at 178.
Indeed, although Defendants emphasized that Lentz reported to one person,
Barrett Smith, who himself claimed to be an MOC employee (CR 92), that still does
not establish that MOC controlled Lentz because there is no reason to conclude that
Smith himself was correct. Smith’s testimony about his own employment status is
as conclusory and incompetent as his testimony about Lentz’s, and it cannot be
reconciled with Defendants’ representation that MOC was merely a dba for
Mewbourne Holdings and had no employees of its own. And the fact that Lentz was
working at an MOC wellhead at the time of his injury also cannot establish the
required right of control on the part of MOC (CR 93), because MOC had no
employees that could have been giving him direction at the site, making the location
irrelevant.
29
Nor is it dispositive, or even relevant, that Lentz himself was among those
who identified MOC as his employer. (E.g., CR 92) As the Texas Supreme Court
has held, “an employee should not be placed in the position of trying to determine,
perhaps at his or her peril, which of two entities was his or her employer.” Wingfoot,
111 S.W.3d at 143. This is especially true for Lentz, who had no familiarity with
either Mewbourne’s corporate structure or the statutory definition of “employer”
under the Workers’ Compensation Act, and could only ascertain his employment
status by relying on second-hand information from others who had an equally infirm
grasp on their own employment status. (Sealed CR 46) Accordingly, neither Lentz’s
testimony about his own employment status, nor other workers’ testimony about
theirs, can be considered conclusive or dispositive summary-judgment proof in
support of MOC’s exclusive-remedy defense.
3. The fact that MOC administered some of the formalities of
Lentz’s employment on Mewbourne Holdings’ behalf does
not conclusively establish MOC was his employer.
Defendants did not offer any other evidence that conclusively established
MOC to be Lentz’s employer. Instead, they pointed to Lentz’s W-2s, direct-deposit
slips, and application for employment, all of which listed MOC as his employer.
(CR 876, 881, 1292, 1295, 1298, 1300, 1307, 1309) But the mere fact that MOC
administered these formalities of Lentz’s employment does not conclusively
establish that MOC actually had a “right to control” Lentz.
30
For one thing, all of this information was filled out by workers who did not
understand their own employment status, let alone Lentz’s. For another, the fact that
MOC maintained these formalities on Mewbourne Holdings’ behalf says nothing
about whether it could control Lentz’s activities—something that was impossible as
both a practical and legal matter based on the evidence that Mewbourne Holdings
maintained all control and ceded none to subsidiaries like MOC. At best, the W-2s,
deposit slips, and employment application merely show that Defendants themselves
were inconsistent in identifying Lentz’s employer, especially for workers’
compensation purposes. But proving an inconsistency is a far cry from offering the
conclusive evidence required for summary judgment in favor of MOC on its
exclusive-remedy defense.7
In short, the most that can be said about these administrative documents is that
they might provide some evidence that MOC was an employer of Lentz. But given
the other evidence demonstrating that Mewbourne Holdings was the sole employer
of all workers in the Mewbourne family of companies, these documents merely raise
7
Defendants exhibited a similarly inconsistent approach in their dealings with OSHA
following Lentz’s accident. At first, they led OSHA to assume that Mewbourne Holdings would
be the entity that would receive the citation, although the citation was eventually issued to MOC.
(CR 93) But then MOC, rather than Mewbourne Holdings, entered into a settlement agreement
with the Department of Labor withdrawing the citation and identifying MOC as the entity
responsible for any remedial action. (CR 93, 382) Regardless, these dealings with OSHA have
only tangential relevance in determining the identity of Lentz’s employer for workers’
compensation purposes.
31
a genuine issue of material fact as to whether MOC is or is not Lentz’s employer.
Accordingly, Defendants did not conclusively establish that MOC is entitled to the
exclusive-remedy bar, and the summary judgment in MOC’s favor must be reversed.
Roberts, 160 S.W.3d at 261.
B. Lentz’s Acceptance of Workers’ Compensation Benefits Does Not
Estop Plaintiffs from Denying that MOC Is Lentz’s Statutory
Employer.
The trial court’s decision to grant summary judgment based on the
Defendants’ alternative affirmative defense of “quasi-estoppel” is equally flawed.
(RR 48) According to Defendants, Lentz’s acceptance of workers’ compensation
benefits “from Starr under the Starr policy” bars Plaintiffs from “recovering against
MOC for negligence,” purportedly because he knew MOC was covered under the
policy. (CR 96–98) But these assertions do not establish grounds for quasi-estoppel,
and they certainly do not allow MOC to avail itself of the exclusive-remedy bar
through the back door of a different defense.
For one thing, Defendants admitted that quasi-estoppel only prevents a party
from asserting a position “inconsistent with a position previously taken” when doing
so would cause another to suffer such “disadvantage” that it would be
“unconscionable” for the party to maintain the inconsistent position. (CR 96,
quoting Lopez v. Muñoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 864 (Tex. 2000))
Even if Lentz accepted his workers’ compensation benefits under the assumption
32
that they were being provided by MOC rather than Mewbourne Holdings, the
Mewbourne Defendants cannot identify any “disadvantage” they suffered because
of that assumption. In fact, they admitted that both MOC and Mewbourne Holdings
are covered under the same Starr policy. (CR 88 n.1, citing Ex. 4 [CR 135])
Defendants thus cannot claim that Lentz lured them into providing benefits they
otherwise would have withheld had they known he would sue MOC for negligence;
either MOC or Mewbourne Holdings would have provided him benefits regardless
of which one of them was actually his employer. Indeed, because the benefits were
ultimately provided by Starr, not the Mewbourne Defendants themselves, they
cannot claim to have suffered any disadvantage at all from the benefits Lentz
received. Accordingly, Defendants failed to establish even the basic elements of
“quasi-estoppel” in this case.
Equally important, there is nothing “inconsistent” between Lentz’s acceptance
of benefits under the Starr policy and Plaintiffs’ decision to assert negligence claims
against MOC. Because Lentz received those benefits under a single policy that
covered both MOC and Mewbourne Holdings, his acceptance of benefits under that
policy is not an admission as to which company—between the two—was his
statutory employer. Indeed, because the benefits were paid by Starr, and his checks
from Starr identified “Mewbourne Holdings” as the insured (Sealed CR 46, 47), it is
entirely consistent for him to accept workers’ compensation benefits under the
33
assumption they were being provided by Mewbourne Holdings—thus leaving
Plaintiffs free to assert claims against MOC as a third party. And Plaintiffs have
acted consistent with that position throughout this case.
Finally, the fact that this case involves a single policy covering two
companies, and the controversy lies in determining which of those two companies is
the statutory employer, makes this case very different from Little v. Delta Steel, 409
S.W.3d 704 (Tex. App.—Fort Worth 2013, no pet.), on which Defendants relied.
(CR 96) Delta Steel did not involve multiple potential employers covered under a
single policy. It did not even involve a dispute over whether the defendant met the
statutory definition of an “employer” for workers’ compensation purposes. As
Defendants acknowledged, the plaintiffs in that case “conced[ed] that Delta Steel
was the employer” (CR 93), and thus the true controversy involved the first
requirement for the exclusive-remedy bar—whether the employer had workers’
compensation insurance coverage. The court concluded that the injured employee’s
acceptance of benefits estopped her from denying that her employer maintained
workers’ compensation insurance coverage. Delta Steel, 409 S.W.3d at 713–14.
That decision was undoubtedly correct—it makes perfect sense that an injured
worker’s acceptance of workers’ compensation benefits would estop him from
denying that his employer is covered by workers’ compensation insurance. But an
injured worker’s acceptance of benefits is not an admission that one particular
34
company among several is the worker’s statutory employer, when all of the potential
employers are covered under a single policy. Nothing in Delta Steel suggests
otherwise. Accordingly, Lentz’s acceptance of workers’ compensation benefits does
not estop Plaintiffs from denying that MOC is his statutory employer, and summary
judgment should not have been granted based on that defense.
PRAYER
For the foregoing reasons, Plaintiffs have raised genuine issues of material
fact as to the identity of Lentz’s workers’ compensation employer that can only be
resolved by a jury. Further, Plaintiffs are not estopped from denying that MOC is
Lentz’s statutory employer. Accordingly, the trial court’s order granting summary
judgment in favor of MOC must be reversed.
35
Respectfully submitted,
/s/ Jeffrey S. Levinger
Omar G. Alvarez Jeffrey S. Levinger
State Bar No. 24045402 State Bar No. 12258300
ogalvarez@ogalvarezlaw.com jlevinger@levingerpc.com
O.G. Alvarez & J. Carl Cecere (of counsel)
Associates, P.C. State Bar No. 24050397
21022 Gathering Oak ccecere@cecerepc.com
San Antonio, TX 78260 Levinger PC
Tel.: 210-354-3900 1700 Pacific Ave.,
Fax: 800-948-7571 Suite 2390
Dallas, TX 75201
Collen A. Clark Tel: 214-855-6817
State Bar No. 04309100 Fax: 214-817-4509
cclark@clarkmccrea.com
Clark & McCrea Attorneys for Appellants
3500 Maple Avenue,
Suite 1250
Dallas, TX 75219
Tel.: 214-780-0500
Fax: 214-780-0501
36
CERTIFICATE OF COMPLIANCE
1. This brief complies with the type-volume limitation of TEX. R. APP. P.
9.4(i)(2)(B) because it contains 8,049 words, excluding the parts of the brief
exempted by TEX. R. APP. P. 9.4(i)(1).
2. This brief complies with the typeface requirements of TEX. R. APP. P.
9.4(e) because it has been prepared in a proportionally spaced typeface using
Microsoft Word 2013 in 14-point Times New Roman font (and 12 point for
footnotes).
/s/ Jeffrey S. Levinger
Jeffrey S. Levinger
37
CERTIFICATE OF SERVICE
The undersigned certifies that a copy of this Brief for Appellants was served
on all counsel of record via the Court’s electronic filing system on this 4th day of
June, 2018.
David M. Gunn John R. Mercy
Beck Redden LLP MERCY ✯ CARTER, L.L.P.
1221 McKinney Ave., Suite 4500 1724 Galleria Oaks Dr.
Houston, TX 77010 Texarkana, TX 75503
Leonard Davis Melinda D. Hamm
Fish & Richardson P.C. Cotton, Bledsoe, Tighe & Dawson, P.C.
110 N. College Ave., Suite 1116 P. O. Box 2776
Tyler, Texas 75702 Midland, Texas 79702-2776
Thomas W. Paterson Reagan L. Butts
Susman Godfrey L.L.P. Mewbourne Oil Company
1000 Louisiana St., Suite 5100 3620 Old Bullard Rd.
Houston, Texas 77002-5096 Tyler, Texas 75701-8644
/s/ Jeffrey S. Levinger
Jeffrey S. Levinger
38
APPENDIX
Order Granting Mewbourne Oil Company and Mewbourne Holdings, Inc.’s
Traditional and No-Evidence Motions for Summary Judgment (CR
1407–08) .............................................................................................................. tab 1
Order Granting Defendants’ Unopposed Motion for Severance and Entry of Final
Judgment (CR 1418–19) ...................................................................................... tab 2
TAB 1
Filed December 7, 201712:29PM
Karen Phillips, County Clerk
Holmes, Annette
Page 1407
CC: C. CLARK, O. ALVAREZ, L. COTTEN, R. KERLICK, L. DAVIS, R. FAIRLESS,
K. RIVAS AND M. KLAFF
Page 1408
TAB 2
Filed January 4, 2018 11:01AM
Karen Phillips, County Clerk
Holmes, Annette
CAUSE NO. 67097.4
WILLIAM BRADLEY LENTZ; $ IN THE COUNTY COURT
BEVERLY LENTZ; JASON LENTZ, M.D.; $
AND RE,BECCA VANLANDINGHAM S
PLAINTIFFS, S
$
v.$ AT LAW NO. 3
$
PANTHER COMPLETION SERVICES, $
LLC; JEREMY WILLIAMSON; $
MARCEAUX ENERGY SERVICES, LLC; $
SANDY MARCEAUX; GREEN MOUNTAIN $
SERVICES, LLC; BRENNTAG S
SOUTHWEST,INC.; CORPORTIVO $
QUIMICO GLOBAL; STEALTH $
COMPLETION SERVICES, LLC; $
JONATHAN JURADO; CACTUS RENTAL $
EQUIPMENT, LLC; ROYDSTON V. $
HOUSE; AARON MANGUM; ORGANIC $
SOLVENT STEAM TREATMENT; NOVA S
DtBtA TRC COMPANIES,INC.; $
MEWBOURNE OIL COMPANY; AND $
MEWBOURNE HOLDINGS,INC. $
DEFENDANTS $ SMITH COUNTY, TEXAS
ORDER GRANTING DEFENDANTS' UNOPPOSED MOTION FOR SEVERANCE AND
ENTRY OF FINAL JUDGMENT
On this day came on to be considered Defendants Mewbourne Oil Company and
Mewbourne Holdings, Inc.'s ("Defendants") Unopposed Motion for Severance and Entry of
Final Judgment and the Courl, having considered same, finds that Defendants' Motion for
Severance and Entry of Final Judgment should be granted.
It is, therefore, ORDERED, that Plaintiffs' claims and causes of action against
Defendants, Mewbourne Oil Company and Mewbourne Holdings, Inc. and the Order Granting
Defendants' Motions for Traditional and No-Evidence Summary Judgment are severed from this
cause of action and shall be assigned Cause No. 67,732-b
ORDER GRANTTNG AGREED MoTIoN FoR SEVERANCE PAGE I
M id la nd\000698\000013\2082864.t
Page 1418
8
SIGNED this _4 day of JAN. 2017.
JUDGE PRESIDING
CC: C. CLARK, L. COTTEN, R. KERLICK, L. DAVIS, R. FAIRLESS, K. RIVAS AND M. KLAFF
ORoEn GnANrruc ACREED MoTIoN r.on SgveneNcE PAGE 2
M idla nd\000698\000013\20 82864.7
Page 1419