Western Rock Co. v. Davis

Texas Court of Civil Appeals · Corporations

CorporationsPiercing the corporate veilVenueOfficer and director liabilityNegligenceArticle 1995 exception 9aplea of privilegevenue facts

Facts

Western Rock conducted blasting near Jacksboro in Jack County from August 1965 through April 1966, and nearby property owners claimed the blasting damaged their homes and business properties. Fuller owned or controlled half of Western Rock through a family corporation, leased the operating assets to Western Rock, financed it, attended board meetings, visited the site, and remained in frequent contact with Stroud, who personally supervised the blasting. By January 1966 Fuller knew of damage complaints, testing of blast violence, a filed lawsuit for damages and injunction, and probable lack of insurance coverage, yet he and Stroud decided to continue blasting for about four more months. The record also showed Fuller later took full control of Western Rock's operations and that the corporation had no assets and was in financial difficulty.

Issue

Whether venue in Jack County was proper under article 1995, exception 9a, by showing negligent acts in Jack County that proximately caused plaintiffs' property damage and were attributable to Western Rock, Stroud, and Fuller. More specifically, the question was whether Fuller could be treated as individually responsible despite claiming he was only a director and whether the evidence sufficiently connected the blasting to the damage.

Rule

Under article 1995, exception 9a, a plaintiff must prove by a preponderance of the evidence that: (1) an act or omission of negligence occurred in the county where suit was filed; (2) the act or omission was that of the defendant personally or of his servant, agent, or representative acting within the scope of employment; and (3) the negligence was a proximate cause of the plaintiff's injury. Corporate officers and directors are not liable merely because of their positions, but they are liable for participation in the wrong, and the corporate fiction may be disregarded when the corporation is used as a mere tool or conduit, to evade obligations, or to justify wrong.

🔒

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

Red Mesa Aggregate, a Nevada corporation, ran a crushing site outside Abilene, Texas. Nina Calder sat on the board, owned half the stock through a family holding company, financed the operation, spoke with the site supervisor almost daily, learned that residents had complained of repeated fly-rock damage and that no insurance likely applied, and then agreed the blasting should continue for three more months.

If homeowners sue Nina in Taylor County and she files a plea to be sued in Dallas County, what is the strongest basis for keeping venue in Taylor County as to her?

Explanation. The majority opinion states that officers and directors are not liable merely because of office, but they are liable when their liability springs from participation in the wrong. Evidence that a director financed the business, controlled assets, stayed in constant contact with the operator, knew of complaints and probable lack of insurance, and nonetheless chose to continue the harmful activity supports treating the negligent conduct in the county as attributable to that person for venue purposes. (Derived from Western Rock Co. v. Davis (n.d.).)