Davis-Lynch, Inc. v. Asgard Technologies, LLC
472 S.W.3d 50
Tex. App.2015Background
- DLI contracted with staffing firms (Pendragon/Asgard) under an annual Agreement for placement and supervision of personnel at DLI; placed workers remained Asgard employees.
- Asgard (and predecessor) placed Nancy Moreno as a receptionist; DLI later (without Asgard’s involvement) promoted her to head of accounting where she had broad financial access.
- Years later DLI discovered Moreno embezzled over $15 million; DLI then learned Moreno had prior misdemeanor theft adjudications while still employed by Asgard.
- DLI sued Asgard and related parties for negligence (including negligent hiring/retention/supervision), breach of contract, breach of fiduciary duty, respondeat superior, and sought indemnity/damages.
- Asgard moved for summary judgment (traditional and no‑evidence); trial court granted traditional summary judgment for Asgard but denied the no‑evidence motion; appeals followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Asgard owe a fiduciary duty to DLI? | Asgard’s contract and long relationship created fiduciary duties to investigate and disclose employee criminal history. | Agreement expressly created an independent‑contractor relationship; no special preexisting trust rose to fiduciary level. | No fiduciary duty; summary judgment for Asgard on fiduciary claim affirmed. |
| Did the Agreement require Asgard to perform background checks (breach of contract)? | Contract terms and indemnity obligations impose a duty to screen and disclose criminal backgrounds. | Agreement is unambiguous and contains no background‑check obligation; court may not rewrite contract. | No contractual duty to run background checks; summary judgment for Asgard on contract claim affirmed. |
| Was Asgard negligent in hiring, supervising, or retaining Moreno (including negligent retention)? | Asgard failed to run background checks, knew of Moreno’s history after 2002, and failed to disclose despite her transfer into accounting. | Moreno’s promotion and accounting duties were under DLI’s control and unforeseeable to Asgard; Asgard had no duty to supervise accounting. | Mixed: summary judgment affirmed as to negligent hiring/supervision (no duty), but reversed as to negligent retention because a fact issue exists whether Asgard knew of Moreno’s theft history and her accounting role and failed to disclose, making embezzlement foreseeable. |
| Is Asgard vicariously liable (respondeat superior) for Moreno’s embezzlement? | DLI: Asgard was Moreno’s employer and contract required supervision, so vicarious liability applies. | Asgard: DLI had exclusive right to control Moreno’s accounting work (borrowed‑servant), so Asgard is not vicariously liable. | Asgard conclusively showed DLI had exclusive control of Moreno in accounting; summary judgment on respondeat superior affirmed. |
Key Cases Cited
- Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) (standard of review for traditional summary judgment)
- State v. $90,235, 390 S.W.3d 289 (Tex. 2013) (affirmance of summary judgment if any independent ground meritorious)
- Timberwalk Apartments, Partners, Inc. v. Cain, 972 S.W.2d 749 (Tex. 1998) (general rule no duty to protect another from third‑party criminal acts)
- Wise v. Complete Staffing Servs., Inc., 56 S.W.3d 900 (Tex. App.—Texarkana 2001) (staffing company not required to investigate criminal histories unless related to job duties)
- St. Joseph Hosp. v. Wolff, 94 S.W.3d 513 (Tex. 2002) (borrowed‑servant/right‑to‑control test for vicarious liability)
- Waffle House, Inc. v. Williams, 313 S.W.3d 796 (Tex. 2010) (noting Texas has not definitively defined scope of negligent hiring/training torts)