Business Staffing, Inc. v. Jackson Hot Oil Service
401 S.W.3d 224
Tex. App.2012Background
- Appellants (BSI, its directors and related entities) appeal a final judgment in favor of Jackson Brothers and Cody Jackson following a jury verdict for DTPA, fraud, and related claims.
- The 1999 Contract between Jackson Brothers and BSI required BSI to obtain workers’ compensation coverage and handle related services for leased employees.
- Cody Jackson, a leased employee of Jackson Brothers, suffered a severe burn injury in 2005, with medical costs over $1 million; BSI allegedly failed to provide workers’ compensation coverage.
- Transglobal Indemnity and related entities were involved as the purported insurer; however, their capacity to pay claims and their regulatory status were disputed.
- The jury found unconscionable/deceptive acts and fraud by multiple Appellants toward Cody Jackson and Jackson Brothers, assessing DTPA damages, actual damages, and exemplary damages, with a remittitur and proposed final judgment executed in 2010.
- The appellate court reformed the judgment to align with DTPA limits, the “one-satisfaction” rule, and the evidence supporting DTPA and fraud findings, while affirming the trial court’s rulings on other issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the JNOV denial on limitations stand on legal sufficiency? | Cody Jackson’s claims accrued when coverage issues arose and discovery occurred; discovery in 2006 tolled limitations. | Accrual in 2002 under contract theory; discovery rule inapplicable; limitations bar claims. | JNOV affirmed; accrual misalignment resolved in favor of applicability of discovery-based limitations. |
| Is there legally/factually sufficient evidence of DTPA fraud against Cody Jackson? | Cody qualifies as a consumer; misrepresentations about coverage reached him and caused damages. | No direct consumer interaction with Cody; insufficient direct misrepresentation evidence. | Evidence sufficient to support DTPA damages and fraud against multiple Appellants. |
| Was there sufficient evidence of fraud against Cody Jackson and related damages? | Misrepresentations about workers’ compensation coverage induced reliance and injury; third-party fraud possible. | No privity required; but evidence insufficient to prove fraud against Cody directly. | Court upheld fraud findings and damages, including exemplary and additional DTPA damages. |
| Did the evidence support excusing Jackson Brothers’ breach of contract? | Fraud/concealment excused performance; representations induced reliance leading to non-performance. | Existence of a valid contract bars excuses; no basis for waiver. | Excusation finding sustained; fraud/waiver evidence supported by trial record. |
| Did the court err in parol evidence and contract construction related to DTPA claims? | DTPA claims allow admissibility of oral representations despite integration clauses. | Integration clauses bar extrinsic evidence; parol rule should apply. | Court rejected parol-evidence error; Weitzel-based approach upheld; extrinsic evidence admissible for DTPA claims. |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standard for legal-sufficiency review and deferential appellate scrutiny)
- Kennedy v. Sale, 689 S.W.2d 890 (Tex. 1985) (employee can be a consumer under the DTPA; privity not required)
- Amstadt v. U.S. Brass Corp., 919 S.W.2d 644 (Tex. 1996) (elements and liberal construction of DTPA claims)
- Weitzel v. Barnes, 691 S.W.2d 598 (Tex. 1985) (parol evidence rule not applicable to DTPA claims based on oral misrepresentations)
- Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) (election of remedies and treble DTPA damages framework)