Jared Moore v. Hooters of America, LLC ( 2023 )

Opinion filed March 30, 2023
In The
Eleventh Court of Appeals
__________
No. 11-21-00168-CV
__________
JARED MOORE, Appellant
V.
HOOTERS OF AMERICA, LLC, Appellee
On Appeal from the 244th District Court
Ector County, Texas
Trial Court Cause No. C-19-08-1106-CV
MEMORANDUM OPINION
This is an appeal from summary judgment rendered against Appellant, Jared
Moore, on traditional and no-evidence grounds. In two issues, Appellant contends
that the trial court erred in granting summary judgment. First, Appellant argues that
Appellee was the proper party to be named or, alternatively, that TW Restaurant
Holder, LLC was effectively sued under Rule 28, the doctrine of misnomer, or the
doctrine of misidentification. Second, Appellant argues that he has set forth more
than a scintilla of evidence on his substantive claims. We affirm.
Factual and Procedural History
On September 13, 2017, Appellant, Jared Moore, suffered injuries after he
was pepper sprayed and shot outside a Hooters in Odessa, Texas, by a hired security
guard, Rance Wayne Struck, who was an employee of independent contractor ION
Security and Investigations (ION). This Hooters was owned and operated by TW
Restaurant Holder, LLC (TWR). Appellee, Hooters of America, LLC, was a parent
business entity to TWR.
On August 23, 2019, Appellant filed suit against three parties: Struck, ION,
and Appellee. Appellee filed a timely sworn verified denial asserting a defect as to
parties.1 Appellee pled that it was not the company that owned, operated, or leased
the premises in Odessa at the time of the incident. Nearly eighteen months later,
Appellant issued his first discovery requests, and Appellee identified TWR as a
potential party to the lawsuit. Soon after, Appellee filed a motion for summary
judgment, asserting grounds for traditional and no-evidence summary judgment,
arguing that Appellant had produced no evidence on each element of his claims and
that Appellee was the wrong party to be sued.
Appellee’s position is that Hooters of America, LLC (HOA) at any relevant
time, was never the owner or operator of, nor did it have or exercise control over,
the Odessa Hooters restaurant or its premises. To the contrary, the business entity
that operated the Odessa restaurant was TWR, a separate LLC from, and a subsidiary
company of, Appellee. Appellee’s position is further that there was no evidence of
HOA employment, direction, control, or duty to train or supervise the ION security
1
ION and Struck also answered, but each settled with Appellant and were dismissed from the
lawsuit on February 11, 2021.
2
guard, Struck. Appellee’s summary judgment evidence primarily consisted of the
unsworn declaration 2 of Benjamin Benson, the general counsel for HOA. Benson
averred that, having personal knowledge:
• HOA and TWR were two different LLC entities.
• At all times relevant, TWR operated the Hooters restaurant in Odessa,
Texas, where the incident occurred.
• It was TWR and Struck’s employer ION, an independent contractor, that
entered into the written contract for the Odessa restaurant’s security.
• HOA at any relevant time did not own, operate, or control the Odessa
Hooters premises.
• HOA did not hire, train, retain, supervise, furnish, control, or employ any
person or agent who worked at the Odessa Hooters.
• HOA did not have any responsibility or role regarding safety or security at
the Odessa Hooters.
• TWR did not employ, pay, or equip Struck. Struck did not report to TWR;
TWR did not instruct Struck about how to do his work; TWR did not direct
Struck to involve himself in the incident; and TWR was not aware that
Struck had followed Appellant out of the building and to the parking lot
where the incident occurred.
No summary judgment evidence submitted by Appellant materially rebutted the
unsworn declaration of Benjamin Benson. Appellant did not complain of any formal
defects in the summary judgment evidence, nor did Appellant challenge Benson’s
personal knowledge or competence as a witness, the basis of his declarations, or the
admissibility of that summary judgment evidence. See Seim v. Allstate Tex. Lloyds,
551 S.W.3d 161, 166 (Tex. 2018).
2
See TEX. CIV. PRAC. & REM. CODE ANN. § 132.001(a), (c), (d) (West 2019).
3
Standard of Review
We review a trial court’s grant of summary judgment de novo. Travelers Ins.
Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010) (citing Provident Life & Accident
Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003)). When reviewing a summary
judgment, we review the evidence in the light most favorable to the nonmovant,
indulge every reasonable inference in favor of the nonmovant, and resolve any
doubts against the motion. Schlumberger Tech. Corp. v. Pasko, 544 S.W.3d 830,
833 (Tex. 2018) (citing City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005)).
To defeat a no-evidence motion for summary judgment, “the nonmovant must
produce at least a scintilla of evidence raising a genuine issue of material fact as to
the challenged elements.” KMS Retail Rowlett, LP v. City of Rowlett, 593 S.W.3d
175, 181 (Tex. 2019); see also TEX. R. CIV. P. 166a(i). Evidence is less than a
scintilla “when the evidence is so weak as to do no more than create a mere surmise
or suspicion of a fact.” KMS Retail Rowlett, LP, 593 S.W.3d at 181.
Generally, when a party files for both traditional summary judgment and no-
evidence summary judgment, we first review the no-evidence motion for summary
judgment. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). However,
“if the movant in a traditional motion challenges a cause of action on an independent
ground, we consider that ground first because it would be unnecessary to address
whether a plaintiff met his burden as to the no-evidence challenge if the cause of
action is barred as a matter of law.” Apollo Expl., LLC v. Apache Corp., 631 S.W.3d
502, 515 (Tex. App.—Eastland 2021, pet. granted) (citing Womack v. Oncor Elec.
Delivery Co., No. 11-17-00233-CV, 2019 WL 3023516, at *3 (Tex. App.—Eastland
July 11, 2019, pet. denied) (mem. op., not designated for publication)). In the no-
evidence summary judgment motion filed in this matter, Appellant has the entire
burden of production. See TEX. R. CIV. P. 166a(i); Town of Dish v. Atmos Energy
Corp., 519 S.W.3d 605, 608 (Tex. 2017). It was incumbent on Appellant to raise a
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genuine issue of material fact supported by summary judgment evidence about those
elements challenged by the no-evidence motion. See First United Pentecostal
Church of Beaumont v. Parker, 514 S.W.3d 214, 220 (Tex. 2017); In re Mohawk
Rubber Co., 982 S.W.2d 494, 498 (Tex. App.—Texarkana 1998, orig. proceeding);
see TEX. R. CIV. P. 166a(i).
Analysis
As stated, we typically review a no-evidence motion for summary judgment
before a traditional summary judgment motion. However, Appellee’s traditional
summary judgment motion challenges Appellant’s suit on grounds independent from
the no-evidence motion: who is (or should be) a party to the lawsuit. Therefore, we
consider it first.
I. Traditional Motion for Summary Judgment
Notwithstanding all other issues raised, where Appellant did not timely sue
and serve TWR, and where no material fact question is raised by summary judgment
evidence demonstrating that HOA is a proper party with potential liability, then we
must affirm the trial court’s granting of summary judgment. Although Appellant
sued only Appellee, he contends that we should permit late suit against TWR.
Appellant relies on Rule 28 of the Texas Rules of Civil Procedure to argue that, as a
matter of law, TWR was properly sued by naming Hooters, using its “assumed or
common name.” Alternatively, Appellant argues that the doctrines of misnomer and
misidentification apply, permitting Appellant to replead against TWR despite the
statute of limitations and despite never having formally amended his petition to
include TWR as a named defendant or served that entity. We examine each
argument in turn.
The issue before us is a common one where commercial branding with an
assumed or trade name such as “Hooters” is used as a marketing tool for business
enterprises. See, e.g., Sixth RMA Partners, L.P. v. Sibley, 111 S.W.3d 46, 53 (Tex.
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2003) (discussing the permissive use of assumed names in Texas). Corporations,
including, as here, limited liability corporations (LLCs), are separate legal entities
that insulate owners and/or shareholders from personal responsibility. Pabich v.
Kellar, 71 S.W.3d 500, 507 (Tex. App.—Fort Worth 2002, pet. denied).
Accordingly, there is nothing illegal or wrong with a growing business dividing
sectors of that business and/or assets and separating them into distinct corporations
or businesses, even if one of the reasons for doing so is to minimize the assets at risk
in the event of a liability lawsuit. Subsidiary and parent corporations are separate
and distinct “persons” as a matter of law. Lenoir v. U.T. Physicians, 491 S.W.3d 68,
88 (Tex. App.—Houston [1st Dist.] 2016, pet. denied). In Texas, corporate entities
are presumed to be separate distinct entities. BMC Software Belgium, N.V. v.
Marchand, 83 S.W.3d 789, 798 (Tex. 2002). Appellant offers no evidence that HOA
and TW, as parent company and subsidiary, are anything other than legitimate
separate businesses.
Rule 28 permits a suit against a business entity in its assumed or common
name. Wilkins v. Methodist Health Care Sys., 108 S.W.3d 565, 569 (Tex. App.—
Houston [14th Dist.] 2003, rev’d on other grounds, 160 S.W.3d 559 (Tex. 2005);
Howell v. Coca-Cola Bottling Co. of Lubbock, 595 S.W.2d 208, 211 (Tex. App.—
Amarillo 1980, writ ref’d n.r.e.). Rule 28 reads in full as follows:
Any partnership, unincorporated association, private
corporation, or individual doing business under an assumed name may
sue or be sued in its partnership, assumed or common name for the
purpose of enforcing for or against it a substantive right, but on a
motion by any party or on the court’s own motion the true name may
be substituted.
TEX. R. CIV. P. 28. A misnomer can be corrected by amendment even after the statute
of limitations expires. In re Greater Houston Orthopaedic Specialists, Inc., 295
S.W.3d 323, 326 (Tex. 2009) (the amendment relates back to the original filing date).
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But if sued in its assumed or common name, “[b]efore judgment, the plaintiff must
amend the petition to add the correct legal name of the actual defendant.”
Chilkewitz v. Hyson, 22 S.W.3d 825, 829 (Tex. 1999) (citing Bailey v. Vanscot
Concrete Co., 894 S.W.2d 757, 760–61 (Tex. 1995)).
Here, an important fact that we must consider in applying Rule 28 is that
Appellant never served TWR. Appellant never attempted to bring TWR into the
lawsuit, nor did he amend his petition to name that entity. See Bailey, 894 S.W.2d
at 760, disapproved of on other grounds by Chilkewitz v. Hyson, 22 S.W.3d 825(Tex. 1999).3 Appellant claims that he exercised diligence and sued TWR in its
common name. Appellant did not sue “Hooters.” Rather, he sued Appellee, not in
its common name, but sued the wrong corporation in its proper corporate name—
Hooters of America, LLC. Appellant would have us fully substitute one legal
entity—HOA—for another—TWR—under Rule 28, and that is not the rule’s
purpose. See Cont’l S. Lines, Inc. v. Hilland, 528 S.W.2d 828, 830 (Tex. 1975)
(“The suit was not brought against an entity in its assumed or trade name,
‘Continental Trailways.’ It was brought against a Texas corporation, Continental
Trailways, Inc., upon which service was had. Service was not had upon Continental
Southern Lines, Inc.”). Rule 28 does not apply to Appellant’s suit. See Howell, 595
S.W.2d at 211–12) (“The cause was originally filed against one corporation, Coca-
Cola Bottling Company, in its corporate name. Subsequently, suit was filed against
a second corporation with a different name and after the statutory time limit for
3
Appellant responded to the motion for summary judgment by claiming that the statute of
limitations would have barred adding TWR as a party. This argument was not raised on appeal, and there
is ample case law contrary to that position. See Chilkewitz, 22 S.W.3d at 827; Harris v. Pioneer Nat. Res.
USA, Inc., No. 11-18-00114-CV 2020 WL 1942603 at *1 (Tex. App.—Eastland Apr. 23, 2020, no pet.)
(mem. op., not designated for publication); Virrey v. Foodmaker, Inc., No. 05-95-00231-CV, 1995 WL
731038, at *1 (Tex. App.—Dallas Dec. 8, 1995, no writ); Howell, 595 S.W.2d at 211.
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bringing suit had expired. Rule 28 is not, under these facts, available to lift the bar
of the statute of limitations.”).
Neither the doctrine of misnomer nor that of misidentification apply. Texas
courts recognize a distinction between misnomer and misidentification. Enserch
Corp. v. Parker, 794 S.W.2d 2, 4 (Tex. 1990). A misnomer arises when a plaintiff
sues the correct entity but misnames it in the pleadings. Greater Houston
Orthopaedic Specialists, 295 S.W.3d at 325. Here Appellant sued the wrong entity.
Courts generally allow a party to correct a misnomer by permitting the subsequent
amendment to relate back to the filing date of the original petition. Id.; Parker, 794
S.W.2d at 4–5. Courts are more flexible in misnomer cases because the correct
defendant has been served and has notice that it is the intended defendant. Greater
Houston Orthopaedic Specialists, 295 S.W.3d at 325–26. Here the correct entity,
TWR, was never named or served, and there is no evidence in the record that TWR
received notice. Suit filed against an erroneous defendant imposes no duty on the
correct entity to intervene and point out a plaintiff’s error. Matthews Trucking Co. v.
Smith, 682 S.W.2d 237, 239 (Tex. 1984).
In the alternative, Appellant asserts that he misidentified the intended
defendant when he sued Appellee rather than TWR, the entity that Appellee’s
summary judgment evidence shows actually owned and operated the premises.
Misidentification occurs when two separate legal entities have similar names and the
plaintiff sues the wrong one. Exxon Mobil Corp. v. Rincones, 520 S.W.3d 572, 594
(Tex. 2017). Misidentification consequences are generally harsh, and it “arises when
two separate legal entities exist and a plaintiff mistakenly sues an entity with a name
similar to that of the correct entity.” Id.; Chilkewitz, 22 S.W.3d at 828. If a plaintiff
is mistaken as to which of two similarly named defendants is the correct one and
there is actually existing a corporation with the name of the erroneously named
defendant, that is misidentification. Exxon Mobil Corp, 520 S.W.3d at 594. HOA
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and TWR are not similar names between which Appellant could become confused
and the alternate theory of misidentification fails under these facts.
Concluding that Rule 28 and the doctrines of misnomer and misidentification
are inapplicable, we overrule Appellant’s first issue.
II. No-Evidence Motion for Summary Judgment
In his second issue, Appellant argues that the trial court erred in granting
Appellee’s no-evidence motion for summary judgment. Appellant sued for
negligence, failure to train and supervise, gross negligence, malice, and assault and
battery based on theories of vicarious liability and respondeat superior. These causes
of action require a legal duty born of the factual relationship between the parties.
Although Appellee contended that each and every element of each and every claim
lacked evidence, the focus of both parties was the relationship between Struck and
Appellee. Appellant argues that either Appellee or TWR had a duty to Appellant.
As per our previous analysis, TWR is not a party to this suit, nor was it effectively
brought in. Appellant’s alleged causes of action lie in tort. We therefore examine
only the duty, if any, that Appellee had to Appellant.
First, Texas courts have held that a parent corporation does not have a duty to
control and is not generally liable for the torts of its subsidiaries. R&M Mixed
Beverage Consultants, Inc. v. Safe Harbor Benefits, Inc., 578 S.W.3d 218, 229–30
(Tex. App.—El Paso 2019, no pet.) (citing Lucas v. Tex. Indus., Inc., 696 S.W.2d
372, 374 (Tex. 1984)). The limitation on liability afforded by the corporate structure
should only be disregarded to the extent that it has been used as an unfair device to
achieve an inequitable result. SSP Partners v. Gladstrong Invs. (USA) Corp., 275
S.W.3d 444, 451 (Tex. 2008). Such examples are to perpetuate fraud, evade existing
obligations, achieve or perpetuate a monopoly, circumvent a statute, protect a crime,
or justify a wrong. Id. Here, there is no summary judgment evidence that allows us
to hold that Appellee is liable for the alleged tortious acts or omissions of TWR.
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Second, no summary judgment evidence before the trial court created a
material fact question as to any alleged duty of HOA to Appellant, or any
relationship between them at all. To prove an action in tort, a party must establish
that the defendant had a legal duty. Nabors Drilling, U.S.A., Inc. v. Escoto, 288
S.W.3d 401, 404 (Tex. 2009); Kroger Co. v. Elwood, 197 S.W.3d 793, 794 (Tex.
2006). The existence of duty is generally a question of law. Pagayon v. Exon Mobil
Corp., 536 S.W.3d 499, 503 (Tex. 2017). As to HOA, there is no summary judgment
evidence of a relationship—statutory, contractual, common law (as employer, hirer
or one affirmatively exercising direction and control) or otherwise—from which a
duty to Appellant arises. See Greater Houston Transp. v. Phillips, 801 S.W.2d 523,
525 (Tex. 1990). Appellee did not own, operate, or control the Hooters restaurant
in Odessa before or on the date of the incident. Therefore, to defeat summary
judgment regarding Appellee’s lack of liability, Appellant would have to provide
evidence that Appellee used the corporate form (i.e., TWR) as an unfair device to
achieve an inequitable result. See SSP Partners, 275 S.W.3d at 454. There is no
evidence in the record of such a use here.
Appellee’s answer to the lawsuit and verified denial comported with all the
necessary rules of procedure and clearly asserted a defect in parties. Appellant filed
suit twenty-one days before the statute of limitations expired and by the time
Appellee filed a timely response, the statute of limitations barred Appellant’s claims
against TWR. Regardless, even after Appellee clearly disputed its inclusion in the
suit by verified denial, discovery did not go forward in an effort to investigate the
alleged party defect. Appellant did not name and serve TWR in reliance on Rule 28
or any other alternative theory of justified mistake. Appellant pursued only the
parent company HOA. This court may not retroactively substitute the correct party
on Appellant’s behalf or ignore the petition as pleaded, the parties as erroneously
named, and the absence of a legal duty owed by Appellee to Appellant;
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consequently, nor may we overturn the trial court’s judgment. See Bailey, 894
S.W.2d at 761.
The trial court properly granted Appellee’s summary judgment motions. We
overrule Appellant’s second issue.
This Court’s Ruling
We affirm the judgment of the trial court.
W. BRUCE WILLIAMS
JUSTICE
March 30, 2023
Panel consists of: Bailey, C.J.,
Williams, J., and Wright, S.C.J. 4
Trotter, J., not participating.
4
Jim R. Wright, Senior Chief Justice (Retired), Court of Appeals, 11th District of Texas at Eastland,
sitting by assignment.
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