Tryco Enterprises Inc., Sharon C. Dixon, James Dixon, Crown Staffing, Inc. and Troy Keith Dixon v. James A. Robinson
390 S.W.3d 497
| Tex. App. | 2012Background
- Robinson sought to enforce a prior FLSA judgment against Tryco Enterprises, Inc., and related defendants after Tryco forfeited its charter and transferred assets to Crown Staffing.
- The FLSA verdict (Aug. 13, 2003) awarded Robinson unpaid overtime, willful violation penalties, attorney’s fees, costs, and interest; judgment entered Sept. 11, 2003.
- Tryco forfeited its corporate privileges Aug. 22, 2003, and assets were transferred to Crown Staffing the same day; Crown Staffing shared officers, location, and personnel with Tryco.
- Robinson sued to pierce the corporate veil and hold James Dixon, Sharon Dixon, Tryco, Crown Staffing, and Troy Dixon liable under alter ego/single-enterprise theories and Texas Tax Code § 171.255.
- During trial, Robinson introduced Edison’s FLSA testimony as evidence in chief; the court admitted the testimony subject to briefing; Robinson later testified to post-forfeiture facts connecting Tryco and Crown Staffing.
- On July 15, 2010, the trial court entered final judgment holding the Dixons, Tryco, and Crown Staffing liable jointly and severally for the Tryco debt; the court reversed as to Troy Dixon and rendered for him take-nothing; affirmed as to the others.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Piercing the corporate veil and alter ego | Robinson urged Tryco and Crown Staffing were alter egos of the Dixons and acted as a single enterprise to defraud Robinson. | Defendants contended Castleberry’s grounds and SSP Partners require independent proof; no valid alter-ego relationship or fraud shown. | Yes for James and Sharon Dixon, Tryco, Crown Staffing; no for Troy Dixon. |
| Hearsay objection to Edison’s FLSA testimony | Edison was a corporate representative; prior testimony admitted as party-admission; non-hearsay. | Hearsay; not properly preserved; required Rule 804/801 analysis. | Appellants’ hearsay objection not preserved; alternative merits relied on Rule 801(e)(2) admission; held admissible. |
| Personal liability under Tax Code § 171.255 after forfeiture | Officers may be liable for debts created or incurred after forfeiture for wrongful acts causing a post-forfeiture judgment. | Argues relation-back doctrine; debts predate forfeiture; cannot attach post-forfeiture judgment. | Affirmative as to James and Sharon Dixon for post-forfeiture debt; Troy Dixon not liable. |
Key Cases Cited
- Castleberry v. Branscum, 721 S.W.2d 270 (Tex. 1986) (separation of alter ego and sham-to-defraud theories; six bases for disregarding the corporate fiction)
- SSP Partners v. Gladstrong Invs. (USA) Corp., 275 S.W.3d 444 (Tex. 2009) (recodification; single-business-enterprise theory curtailed; actual fraud standard)
- Schwab v. Schlumberger Well Surveying Corp., 198 S.W.2d 79 (Tex. 1946) (premises of post-forfeiture liability; defines ‘created’ and ‘incurred’)
- Silberstein v. Silberstein, 398 S.W.2d 914 (Tex. 1966) (post-forfeiture debts incurred due to officers’ acts)
- Taylor v. First Cmty. Credit Union, 316 S.W.3d 863 (Tex.App.—Houston [14th Dist.] 2010) (discusses debt created or incurred after forfeiture; relation-back analysis)
- Jonnet v. State, 877 S.W.2d 520 (Tex.App.—Austin 1994) (post-forfeiture penalties; relation-back analysis distinguished)
- Cain v. State, 882 S.W.2d 515 (Tex.App.—Austin 1994) (debt after forfeiture; liability of officers for post-forfeiture costs)
- Beesley v. Hydrocarbon Separation, Inc., 858 S.W.2d 415 (Tex.App.—Dallas 2012) (distinguishes types of post-forfeiture debts for liability)