Synergy Management Group, L.L.C. v. Kenneth Thompson

Opinion filed December 6, 2012
In The
Eleventh Court of Appeals
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No. 11-11-00229-CV
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SYNERGY MANAGEMENT GROUP, L.L.C., Appellant
V.
KENNETH THOMPSON, Appellee
On Appeal from the 259th District Court
Jones County, Texas
Trial Court Cause No. 20,821
OPINION
Kenneth Thompson sued Synergy Management Group, L.L.C. for injuries he sustained in
an accident at its facility. The jury found in Thompson’s favor on his negligence and gross
negligence claims and awarded him actual and exemplary damages. The trial court entered a
judgment in accordance with the jury’s verdict. We affirm.
Background Facts
Thompson was employed by Alliance Savings Co., Inc. and was assigned to work at
Synergy’s tire recycling plant. Thompson was injured on July 2, 2004, when his left arm got
stuck in a conveyor belt at the plant. Thompson sustained broken bones during the incident, and
he had two surgeries to repair the fractures.
After the accident, Thompson’s medical bills were paid by workers’ compensation
insurance, and Thompson was paid weekly workers’ compensation benefits. The medical bills
and weekly benefits were apparently paid under a workers’ compensation insurance policy on
which “Alliance Savings Company” was listed as an additional insured. Later, Thompson filed
suit against Synergy; Alliance Savings Co., Inc.; and others. In his petition, Thompson alleged
that, at the time of his accident, he was an employee of Synergy and Alliance Savings Co., Inc.
He alleged negligence and gross negligence claims against Synergy and Alliance Savings Co.,
Inc. In its answer, Synergy alleged an affirmative defense that Thompson’s claims against it
were barred by the exclusive remedy provision of the Texas Workers’ Compensation Act
(TWCA). See TEX. LAB. CODE ANN. § 408.001(a) (West 2006).
Synergy filed a traditional motion for summary judgment based on its exclusive remedy
defense. Following a hearing, the trial court denied Synergy’s motion. Synergy was the only
remaining defendant at the time of trial. The case proceeded to a jury trial. After the parties
presented evidence to the jury, Synergy presented evidence to the trial court relating to its
exclusive remedy defense. Synergy moved for a directed verdict on the defense. The trial court
denied Synergy’s motion. The jury found in Thompson’s favor on his negligence and gross
negligence claims, and it awarded him $670,000 in actual damages and $1,000,000 in exemplary
damages. Synergy filed a motion for judgment notwithstanding the verdict (JNOV) based on its
exclusive remedy defense. Following a hearing, the trial court denied the motion and entered its
judgment.
Issue on Appeal
In a single appellate issue, Synergy contends that the trial court erred when it ruled that
the exclusive remedy provision in the TWCA did not bar Thompson’s claims against it. In its
issue, Synergy does not challenge a specific ruling by the trial court. We interpret Synergy’s
issue as challenging the trial court’s denial of its motion for JNOV. As shown below, the
analysis of Synergy’s issue is the same whether it is viewed as a challenge to the trial court’s
denial of Synergy’s motion for directed verdict or of its motion for JNOV.
Standard of Review
A trial court may disregard a jury’s findings and grant a motion for JNOV only when a
directed verdict would have been proper. Fort Bend Cnty. Drainage Dist. v. Sbrusch, 818
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S.W.2d 392, 394 (Tex. 1991); Clear Lake City Water Auth. v. Clear Lake Country Club, L.P.,
340 S.W.3d 27, 33 (Tex. App.—Houston [1st Dist.] 2011, no pet.). We review a trial court’s
ruling on a motion for directed verdict or a motion for JNOV under a legal-sufficiency standard.
City of Keller v. Wilson, 168 S.W.3d 802, 823–24 (Tex. 2005); City of Houston v. Proler, 373
S.W.3d 748, 754 (Tex. App.—Houston [14th Dist.] 2012, no pet.).
The exclusive remedy provision of the TWCA is an affirmative defense that the
defendant must plead and prove. Exxon Corp. v. Perez, 842 S.W.2d 629, 630–31 (Tex. 1992);
Warnke v. Nabors Drilling USA, L.P., 358 S.W.3d 338, 343 (Tex. App.—Houston [1st Dist.]
2011, no pet.). A directed verdict in favor of a defendant is proper if the evidence conclusively
establishes a defense to the plaintiff’s cause of action. Prudential Ins. Co. of Am. v. Fin. Review
Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000); Martin v. Birenbaum, 193 S.W.3d 677, 680 (Tex.
App.—Dallas 2006, pet. denied); Whitney Nat’l Bank v. Baker, 122 S.W.3d 204, 207 (Tex.
App.—Houston [1st Dist.] 2003, no pet.). A trial court should grant a motion for JNOV when
the moving party has established each element of its defense so conclusively that reasonable
minds could not differ as to the truth of the controlling facts. Brown v. Zimmerman, 160 S.W.3d
695, 702 (Tex. App.—Dallas 2005, no pet.). When a party challenges the legal sufficiency of the
evidence supporting an adverse finding on an issue on which the party had the burden of proof, it
must show that the evidence establishes, as a matter of law, all vital facts in support of the issue.
Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001); PopCap Games, Inc. v.
MumboJumbo, LLC, 350 S.W.3d 699, 710 (Tex. App.—Dallas 2011, pet. denied).
Synergy’s Affirmative Defense
Synergy’s exclusive remedy defense was based on the provisions of the Staff Leasing
Services Act (SLSA). The SLSA is found in Chapter 91 of the Texas Labor Code. See TEX.
LAB. CODE ANN. §§ 91.001-.063 (West 2006 & Supp. 2012). Synergy argues that it and Alliance
Savings Co., Inc. were co-employers of Thompson under the SLSA; that Alliance Savings Co.,
Inc. obtained workers’ compensation insurance; and that, therefore, Thompson’s claims against it
were barred by the exclusive remedy provision of the TWCA. Synergy contends that it proved
the following facts to establish its exclusive remedy defense: (1) that Alliance Savings Co., Inc.
was a licensed staff leasing services provider; (2) that Thompson was employed by Alliance
Savings Co., Inc. and assigned to work at Synergy; and (3) that Alliance Savings Co., Inc.
obtained workers’ compensation insurance that covered Thompson.
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In its brief, Synergy relies on evidence that it presented to the trial court in support of its
motion for summary judgment. In our review, we cannot consider summary judgment evidence
that was not admitted during the trial on the merits. Paselk v. Rabun, 293 S.W.3d 600, 612 (Tex.
App.—Texarkana 2009, pet. denied). Additionally, some of the exhibits, including affidavits,
that Synergy attached to its motion for JNOV were not admitted at trial. Synergy relies on these
exhibits to support its argument on appeal. We cannot consider these exhibits for a number of
reasons. First, they were not admitted as evidence during trial. Second, the affidavits would
have been inadmissible as trial evidence. Stephens v. City of Reno, 342 S.W.3d 249, 253 (Tex.
App.—Texarkana 2011, no pet.). Third, if requested, the trial court could not have allowed
Synergy to offer additional evidence after the jury reached its verdict. TEX. R. CIV. P. 270 (“[I]n
a jury case no evidence on a controversial matter shall be received after the verdict of the jury.”);
Univ. of Tex. at Austin v. Ables, 914 S.W.2d 712, 718 (Tex. App.—Austin 1996, no writ).
Therefore, in our analysis of Synergy’s issue, we must consider only the evidence that was
admitted during the trial on the merits.
Analysis
Synergy contends that the evidence established that Alliance Savings Co., Inc. was a
licensed staff leasing company under the SLSA. As defined in the SLSA, a “[l]icense holder” is
“a person licensed under this chapter to provide staff leasing services.” Section 91.001(11). A
“[c]lient company” is “a person that contracts with a license holder and is assigned employees by
the license holder under that contract.” Id. § 91.001(3). Under the SLSA, a license holder may
elect to obtain workers’ compensation insurance coverage for its assigned employees. Id.
§ 91.042(a). If the license holder elects to obtain such coverage, the policy also covers the client
company. Id. §§ 91.006(a), 91.042(c); Garza v. Exel Logistics, Inc., 161 S.W.3d 473, 478 (Tex.
2005); Vega v. Silva, 223 S.W.3d 746, 748 (Tex. App.—Dallas 2007, no pet.). Under Section
91.042(c) of the SLSA, the license holder and the client company are considered to be co-
employers for workers’ compensation insurance purposes. If a license holder elects to obtain
workers’ compensation insurance, the license holder and the client company are both protected
by the exclusive remedy provision of the TWCA. Section 91.042(c); Tex. Workers’ Comp. Ins.
Fund v. Del Indus., Inc., 35 S.W.3d 591, 594 (Tex. 2000); Vega, 223 S.W.3d at 748.
Synergy did not offer evidence that Alliance Savings Co., Inc. was a licensed staff
leasing services company. Synergy cannot, therefore, claim the benefit of Alliance Savings Co.,
Inc.’s workers’ compensation insurance. Hodges v. Tex. TST, Inc., 303 S.W.3d 880, 882 (Tex.
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App.—Eastland 2009, no pet.). The SLSA provides that a license holder and its client company
are co-employers for workers’ compensation insurance purposes. Section 91.042(c). Co-
employer status of a client company depends on the staff leasing services company being a
license holder. Because Synergy failed to establish that Alliance Savings Co., Inc. was a license
holder, Synergy and Alliance Savings Co., Inc. could not be co-employers of Thompson under
the SLSA, and Synergy was not protected by the exclusive remedy provision in the TWCA by
virtue of the SLSA. See id.
During trial, Synergy introduced into evidence a copy of a Staff Leasing Services License
that was issued to “Alliance Staffing Solutions, Inc.” However, Synergy did not present
evidence explaining the relationship, if any, between Alliance Savings Co., Inc. and Alliance
Staffing Solutions, Inc. In the summary judgment proceedings and in its motion for JNOV,
Synergy attempted to establish that Alliance Savings Co., Inc. was doing business under the
name, Alliance Staffing Solutions, Inc. As stated above, we cannot consider summary judgment
evidence or exhibits to Synergy’s motion for JNOV that were not admitted at trial.
Even if we could consider the summary judgment evidence and the motion-for-JNOV
exhibits, we would conclude that Synergy failed to meet its burden of showing that Alliance
Savings Co., Inc. was a license holder. Section 91.011 of the SLSA prohibits a person from
engaging in staff leasing services without a license. In this case, Alliance Staffing Solutions, Inc.
was the license holder. Section 91.018(a) prohibits a license holder from conducting business
“under any name other than that specified in the license” or “under any fictitious or assumed
name without prior written authorization from the department.” Section 91.018(a) also provides
that licenses issued under the SLSA are not assignable. Based on these provisions, Alliance
Staffing Solutions, Inc. could not conduct business under any other name, such as Alliance
Savings Co., Inc.
Synergy did not raise an affirmative defense that Thompson was its borrowed servant at
the time of his accident. See Hodges, 303 S.W.3d at 882; Wesby v. Act Pipe & Supply, Inc., 199
S.W.3d 614, 617–18 (Tex. App.—Dallas 2006, no pet.); see also Wingfoot Enters. v. Alvarado,
111 S.W.3d 134, 146–49 (Tex. 2003). Nor did Synergy raise an affirmative defense of waiver or
election of remedies based on Thompson’s acceptance of workers’ compensation benefits after
his accident. See Medina v. Herrera, 927 S.W.2d 597, 599–600 (Tex. 1996); Berry v. Gregg
Indus. Servs., Inc., 907 S.W.2d 4, 6 (Tex. App.—Tyler 1994, writ denied). Rather, Synergy’s
exclusive remedy defense was based on the SLSA.
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The evidence did not conclusively establish Synergy’s exclusive remedy defense.
Therefore, the trial court did not err when it denied Synergy’s motion for JNOV. Synergy’s
appellate issue is overruled.
This Court’s Ruling
The judgment of the trial court is affirmed.
TERRY McCALL
JUSTICE
December 6, 2012
Panel consists of: Wright, C.J.,
McCall, J., and Hill.1
1
John G. Hill, Former Chief Justice, Court of Appeals, 2nd District of Texas at Fort Worth, sitting by assignment.
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