“We have never held corporations liable for each other’s obligations merely because of centralized control, mutual purposes, and shared finances. There must also be evidence of abuse . . . .”
How later courts described this case
- “We have never held corporations liable for each other’s obligations merely because of centralized control, mutual purposes, and shared finances. There must also be evidence of abuse . . . .”
Written by the judges who cited it.
The opinion
Opinion issued June 22, 2023
In The
Court of Appeals
For The
First District of Texas
———————————
NO. 01-22-00477-CV
———————————
DANIEL BRAND AND JAMES WELLS, Appellants
V.
SOJITZ CORPORATION OF AMERICA, Appellee
On Appeal from the 152nd District Court
Harris County, Texas
Trial Court Case No. 2018-47552-A
MEMORANDUM OPINION
Appellants, Daniel Brand and James Wells (collectively, “the workers”),
challenge the trial court’s rendition of summary judgment in favor of appellee, Sojitz
Corporation of America (“SCA”), in the workers’ suit against SCA for negligence,
gross negligence, and premises liability. In their sole issue, the workers contend that
the trial court erred in granting summary judgment in favor of SCA.
We affirm.
Background
In their first amended petition, the workers alleged that “[o]n or about May 2,
2018, [they] were working at a [p]lant” in LaPorte, Harris County, Texas (the
“Metton LaPorte plant”). On that date, “operational issues were reported” about
“equipment and ongoing operations” at the plant. But “[d]espite notice of equipment
malfunction and potential hazards,” SCA and others,1 failed to take “adequate steps
to evacuate [the workers], to minimize the potential hazards, or to adequately rectify
the situation.” Instead, the workers “and the other employees” were ordered “to
continue work.” “[A] significant explosion and fire occurred,” resulting in serious
injury to the workers. The workers “suffered injuries to their heads, arms, necks,
backs and other parts of their bodies.” They “also suffered from emotional
disturbance as a result of their injuries, including anxiety, difficulty in focusing and
concentration, and sleep disturbance.”
1
The workers’ first amended petition named SCA, Sojitz Energy Venture, Inc., and
Metton America, Inc. (“Metton”) as defendants. The workers eventually nonsuited
their claims against Sojitz Energy Venture, Inc., and Metton filed its own
summary-judgment motion related to the workers’ claims against it, which the trial
court denied. After the trial court granted SCA summary judgment, it severed the
workers’ claims against SCA from the underlying suit, and the workers appealed.
2
The workers brought claims against SCA for negligence, gross negligence,
and premises liability. According to the workers, SCA had a duty to warn them of
the “dangerous conditions” at the plant; “exercise reasonable care” to guard against
“known and foreseeable hazards”; “provide a safe work environment”; protect them
“from fire and/or explosion”; “adequately train [its] employees”; “adequately
develop and implement appropriate policies and procedures”; “adequately
supervise” its personnel; “timely recognize an emergency and/or hazardous
situation”; and “provide adequate first aid and assistance.” But SCA breached those
duties and “[create]ed an unreasonably dangerous condition” that proximately
caused the workers’ injuries. Thus, the workers asserted that they were entitled to
“recover for their injuries.” And because SCA’s “actions were done with a reckless
disregard to a substantial risk of severe bodily injury,” the workers argued, they were
“entitled to exemplary damages” as well.
As to their premises-liability claim, the workers’ alleged that SCA “owned,
occupied and/or controlled the area where [the workers] were injured,” were aware
that the “condition of the area where [the workers] were injured posed an
unreasonable risk of harm,” and “had actual knowledge or reasonably should have
known of the unreasonably dangerous condition.” The workers, though, “did not
have actual knowledge of the unreasonably dangerous condition.” The workers
argued that because they were invitees of SCA, SCA “had a duty to either warn”
3
them of the “unreasonably dangerous condition” or eliminate it. But SCA breached
its duties, and its breach proximately caused the workers’ injuries.
The workers sought damages “in excess of $1,000,000.00,” including
compensatory, actual, and consequential damages and recovery for “[p]ain and
suffering,” “[p]ast and future mental anguish,” “[p]ast and future impairment,”
“[p]ast and future disfigurement,” as well as exemplary damages.
SCA answered, generally denying the workers’ allegations. SCA also attested
in a verified denial that “SCA d[id] not own or operate the [Metton LaPorte plant]
where the incident occurred and was not involved in the alleged events made the
basis of [the workers’] suit.” For those reasons, SCA “denie[d] that it [wa]s a proper
party” to the workers’ suit and it was not “liable in the capacity in which it [was]
sued.”
SCA then moved for summary judgment, asserting that it was entitled to
judgment as a matter of law on the workers’ claims against it and there was no
evidence to support the workers’ negligence, gross negligence, and premises liability
claims. In its motion, SCA argued that it was entitled to judgment as a matter of law
because it was “a wholly separate company from Metton,” who was “the owner and
operator of the [Metton LaPorte plant]” where the workers were injured. SCA was
“a trading company,” and its chemical division “purchase[d] resin materials for
4
liquid molding” manufactured by Metton. Thus, SCA maintained, it “ha[d] nothing
to do with the plant or the allegations in [the workers’] lawsuit.”
SCA attached to its summary-judgment motion a copy of the deposition
testimony of its corporate representative, Tekashi Uesaka. In her deposition, Uesaka
explained that SCA bought petroleum resin from U.S. manufacturers and sold it to
its clients in Asia. According to Uesaka, SCA “invested in chemicals and traded
chemical products”; it did not manufacture resin. Metton made “raw materials for
plastic resin,” and SCA sold some of the materials made by Metton.
According to Uesaka, SCA had a ninety-five percent investment in Metton’s
stock, and “Sojitz Europe” held the remaining five percent of Metton’s stock. But
SCA did not oversee the Metton LaPorte plant. Uesaka explained that “Metton ha[d]
[its] own operation method” and “procedures,” and SCA did not “give any opinions
or comments to [Metton]” about those functions. SCA’s role as to Metton was
limited to “manag[ing]” or “see[ing] the results of [its] performance.”
According to SCA, because the evidence showed that it “had no involvement
in ownership or operations” of the Metton LaPorte plant, SCA did not “owe[] a duty,
breach[] any duty,” or “proximately cause[] the incident or injuries alleged by the
[workers].” SCA also argued that because it did not own or occupy the Metton
LaPorte plant, it could not be held liable under a premises-liability theory.
5
As to its no-evidence grounds, SCA asserted that the workers had no evidence
that SCA owed them a legal duty, SCA breached any duty owed to the workers, and
that any breach of a duty owed by SCA “proximately caused the accident and
injuries.” SCA also argued that the workers could not prove their premises-liability
claim against SCA because there was no evidence that “SCA was the possessor[] of
the premises,” “[a] condition of the plant posed an unreasonable risk of harm,” “SCA
knew or reasonably should have known of the danger” posed by such condition, and
SCA “fail[ed] to adequately warn” the workers of such condition or “fail[ed] to make
the condition reasonably safe.” Further, SCA maintained that there was no evidence
that any breach by SCA “proximately caused the accident and injuries.”
In their response to SCA’s summary-judgment motion, the workers asserted
that “[a] genuine issue of material fact exist[ed] as to whether [SCA] had actual
control over the safety and security of workers at the [Metton LaPorte plant].”
According to the workers, SCA “exercised control over the safety and security of
the workers at the [Metton LaPorte plant] both generally and on . . . May 2, 2018.”
As the they explained in their response, on May 2, 2018, the workers “were
on assignment from their employers to work as independent contractors at the
[Metton LaPorte plant].” They began their shift at 6:00 p.m. When they arrived at
the plant, a batch of “component B in Tank 510” that had been made earlier in the
day “was solidifying, which was extremely dangerous.”
6
Eventually, the component B began “coming out” of “Tank 510,” “which was
serious cause for concern.” A few Metton employees expressed concern, and two
“stated that Tank 510 ha[d] reached its max[imum] temperature.” A fourth Metton
employee called the vice president of the Metton La Porte plant, Masanori Abe, as
soon as he heard about the “problems with the tank.”
Abe “arrived at the [Metton La Porte] plant,” “assessed the situation,” and
“concluded that . . . Tank 510 was not going to explode.” Abe then “informed
Metton staff and other workers that it was safe to go back to work.” Abe did not
order an evacuation of the plant even though he knew “the temperature” inside the
tank “was uncontrollably rising, creating a high risk that there could be an explosion
and/or fire.”
About an hour after Abe had assured the workers that it was safe to continue
to work, Tank 510 exploded. “Brand was working on the truck loading area, which
was approximately 50 feet” from where the tank exploded. “Wells was also near the
tank . . . when the explosion occurred.” “[T]he blast knocked both [workers] off
their feet” and caused them to suffer serious injuries.
The workers noted that SCA was Metton’s parent company and was “owned
by Sojitz Japan.” Further, “all upper management positions at Metton were assigned
from Sojitz Japan,” including that of vice president Abe. “Sojitz Japan” also
“select[ed]” the president for the Metton LaPorte plant, who was “responsible for
7
ensuring the safety of workers at the plant.” Thus, according to the workers, “Sojitz,
not Metton, was in charge and control of safety” at the Metton LaPorte plant.
The workers attached to their response a copy of the deposition testimony of
the Metton LaPorte plant’s safety manager, Gwendolyn McNeil. McNeil testified
that salaried Metton employees received an annual training from “Sojitz”2 “[o]n the
computer.” Sojitz personnel had also come to the plant for training. On one
occasion, “two employees from Sojitz New York” came to the Metton LaPorte plant
and “attended the class” about “shipment of hazardous goods” with Metton
employees Judy Johnson, the customer liaison who was also in charge of shipping,
Beau West, the manager of the Metton LaPorte plant, vice president Abe, and
McNeil. McNeil also testified that Sojitz representatives “would bring college
students” from abroad into the Metton LaPorte plant for tours, and she would “do a
safety presentation for [them].”
As to the tank that exploded, the workers noted that McNeil acknowledged in
her deposition testimony that she did not know how often maintenance checks were
performed to ensure that the safety valves on the tanks worked properly. According
2
“Sojitz” was defined earlier in McNeil’s deposition by the workers’ trial counsel as
meaning a “Japanese organization” that was Metton’s “parent company.” This
definition does not accurately refer to either “Sojitz Japan,” which is the only
Japanese entity identified in the record, or SCA, which holds the majority of
Metton’s stock.
8
to the workers, those “valves c[ould] play a critical role in preventing the very type
of accident” that injured the workers.
The workers also attached to their response a copy of the deposition testimony
of plant manager West, in which he stated that Sojitz bought the Metton LaPorte
plant from Jim Brown sometime before 2002. According to the workers, West
testified that “Metton did not follow its own policies and procedures or industry
standards and failed to conduct” annual hazard studies from 2014 to 2018. West
also testified that “there [wa]s no documentation showing that there was any routine
maintenance, inspection, or repair of [Tank 510’s] regulator” or “pressure release
valve.”
The workers asserted that “Sojitz ha[d] been staffing” the “upper management
positions” at the Metton LaPorte plant “with Sojitz employees” from Japan “since
approximately 2002.” For instance, Abe was an “upper management employee
placed at the [Metton La Porte plant] by Sojitz.” According to the workers,
“[n]umerous people testified” in their depositions that “they would have not gone
back out” near Tank 510 had Abe not told them that “it was safe.” That testimony
made “clear that Sojitz, not Metton, was in charge” and in “control of safety at the
[Metton LaPorte plant], and thus [owed the workers] a duty.”
In SCA’s reply to the workers’ response to its summary-judgment motion,
SCA reiterated that it “had no involvement” in Metton’s “operations” and “did not
9
occupy the premises” of the Metton LaPorte plant. SCA was “a wholly separate
company” from Metton. SCA emphasized that “Texas law presumes that two
separate companies are . . . distinct legal entities,” so “related companies in a
corporate hierarchy cannot be treated as the same entity for liability purposes.” For
this reason, whether “Metton’s upper management positions were assigned from
Sojitz Japan” was “irrelevant” because those individuals were nonetheless “Metton
employees.” Such an “administrative act or decision by a parent company ha[d] no
bearing” on the workers’ claims against SCA. Thus, SCA asserted, there was “[n]o
basis to attribute the actions of Abe,” a Metton employee, to “impose liability on
SCA under a negligent undertaking theory of liability.”
SCA further observed that the sole exception to the rule that “parent
corporations generally have no duty to control their subsidiaries . . . involves an
undertaking by the parent company which directly promotes the interests of the
subsidiary in providing a safe workplace.” But because SCA “d[id] not oversee the
operations at the Metton [LaPorte plant],” “the evidence presented by SCA show[ed]
that there [wa]s no genuine issue of material fact on th[at] issue.”
SCA also noted that the workers did not allege the elements of a
negligent-undertaking claim in their live pleading. And “[e]ven if” the workers had
“timely alleged” a negligent-undertaking claim, proof of their “cause of action would
still require evidence that SCA undertook some action relevant to [the workers’]
10
broader issues of plant safety.” But according to SCA, there was “no support for the
conclusion that SCA was . . . involved in the safety of the Metton [LaPorte plant].”
The trial court granted SCA summary judgment motion on the workers’
negligence, gross negligence, and premises-liability claims against it, and SCA
moved to sever the workers’ claims against it from those the workers had brought
against Metton. The trial court granted the severance, making the summary
judgment final.
Standard of Review
We review a trial court’s decision to grant summary judgment de novo.
Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident Life
& Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). In conducting our
review, we take as true all evidence favorable to the non-movants, and we indulge
every reasonable inference and resolve any doubts in the non-movants’ favor.
Valence Operating, 164 S.W.3d at 661; Knott, 128 S.W.3d at 215. When, as here,
the trial court does not specify the grounds on which it granted summary judgment,
we must affirm if any of the summary-judgment grounds are meritorious. See
Beverick v. Koch Power, Inc., 186 S.W.3d 145, 148 (Tex. App.—Houston [1st Dist.]
2005, pet. denied).
To prevail on a no-evidence summary-judgment motion, the movant must
establish that there is no evidence to support an essential element of the
11
non-movants’ claim on which the non-movants would have the burden of proof at
trial. See TEX. R. CIV. P. 166a(i); Fort Worth Osteopathic Hosp., Inc. v. Reese, 148
S.W.3d 94, 99 (Tex. 2004); Hahn v. Love, 321 S.W.3d 517, 523–24 (Tex. App.—
Houston [1st Dist.] 2009, pet. denied). The burden then shifts to the non-movants
to present evidence raising a genuine issue of material fact as to each of the elements
challenged in the motion. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex.
2006); Hahn, 321 S.W.3d at 524. A no-evidence summary judgment may not be
granted if the non-movants bring forth more than a scintilla of evidence to raise a
genuine issue of material fact on the challenged elements. See Ford Motor Co. v.
Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). More than a scintilla of evidence exists
when the evidence “rises to a level that would enable reasonable and fair-minded
people to differ in their conclusions.” Merrell Dow Pharm., Inc. v. Havner, 953
S.W.2d 706, 711 (Tex. 1997) (internal quotations omitted). The trial court must
grant a no-evidence summary-judgment motion if the movant asserts that there is no
evidence of one or more specified elements of the non-movants’ claim on which the
non-movants would have the burden of proof at trial and the non-movants fail to file
a timely response or fail to produce summary-judgment evidence raising a genuine
issue of material fact on each challenged element. See TEX. R. CIV. P. 166a(i);
Lockett v. HB Zachry Co., 285 S.W.3d 63, 67 (Tex. App.—Houston [1st Dist.] 2009,
no pet.).
12
To prevail on a matter-of-law summary-judgment motion, a movant has the
burden of establishing that there is no genuine issue of material fact and it is entitled
to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Cathey v. Booth, 900 S.W.2d
339, 341 (Tex. 1995). When a defendant moves for summary judgment on the
plaintiffs’ claim, it must either (1) disprove at least one essential element of the
plaintiffs’ cause of action or (2) plead and conclusively establish each essential
element of its affirmative defense, thereby defeating the plaintiffs’ cause of action.
Cathey, 900 S.W.2d at 341; Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197
(Tex. 1995). Once the movant meets its burden, the burden shifts to the non-movants
to raise a genuine issue of material fact precluding summary judgment. See Siegler,
899 S.W.2d at 197; Transcont’l Ins. Co. v. Briggs Equip. Tr., 321 S.W.3d 685, 691
(Tex. App.—Houston [14th Dist.] 2010, no pet.). The evidence raises a genuine issue
of fact if reasonable and fair-minded jurors could differ in their conclusions in light
of all of the summary-judgment evidence. Goodyear Tire & Rubber Co. v. Mayes,
236 S.W.3d 754, 755 (Tex. 2007).
Negligent Undertaking
In their sole issue, the workers argue that the trial court erred in granting
summary judgment in favor of SCA on their negligence, gross negligence, and
premises-liability claims because they raised a genuine issue of material fact as to
13
whether SCA assumed a duty of care to the workers by voluntarily undertaking the
responsibility of providing the Metton LaPorte plant with safety training.
One who voluntarily undertakes an affirmative course of action for the benefit
of another has a duty to exercise reasonable care that the other’s person or property
will not be injured by the undertaking. Colonial Sav. Ass’n v. Taylor, 544 S.W.2d
116, 119–20 (Tex. 1976); Torres v. Pasadena Ref. Sys., Inc., No.
01-18-00638-CV, --- S.W.3d --- , 2022 WL 17684333, at *13 (Tex. App.—Houston
[1st Dist.] 2022, no pet.). To establish a negligent undertaking, the plaintiffs must
show that: (1) the defendant undertook to perform services that it knew or should
have known were necessary for the plaintiffs’ protection; (2) the defendant failed to
exercise reasonable care in performing those services; and (3) either (a) the plaintiffs
suffered harm because of their reliance on the defendant’s performance or (b) the
defendant’s failure to exercise such care increased the plaintiffs’ risk of harm. Nall
v. Plunkett, 404 S.W.3d 552, 555–56 (Tex. 2013); Torres, 2022 WL 17684333, at
*13.
To satisfy the duty element of a negligent-undertaking claim, the workers
were required to present evidence raising a fact issue about whether SCA acted in a
way that required the imposition of a duty where one otherwise would not exist. See
Nall, 404 S.W.3d at 555; Torres, 2022 WL 17684333, at *13; see also Bauer v.
Gulshan Enters., Inc., 617 S.W.3d 1, 21 (Tex. App.—Houston [1st Dist.] 2020, pet.
14
denied) (recognizing absent special relationship or circumstances, Texas law
generally imposes no duty to take action to prevent harm to others).
The workers first assert that safety manager McNeil’s deposition testimony
that Sojitz3 provided annual online training and a class about “shipment of hazardous
goods” for salaried employees of the Metton LaPorte plant raises a fact issue about
whether SCA assumed a duty to provide the Metton LaPorte plant with safety
training. Cases that have extended liability to a parent corporation for injuries to its
subsidiary’s employees based on an affirmative undertaking theory have “involved
incidents where the parent corporation had engaged in an undertaking which directly
promoted the interests of its subsidiary in providing a safe workplace.”
Abdel-Fattah v. Pepsico, Inc., 948 S.W.2d 381, 385 (Tex. App.—Houston [14th
Dist.] 1997, no writ); see also Coastal Corp. v. Torres, 133 S.W.3d 776, 780–81
(Tex. App.—Corpus Christi–Edinburg 2004, pet. denied) (parent company’s refusal
to budget funds allegedly necessary for maintaining safety of refinery did not
constitute affirmative undertaking to control “safety duty” that refinery owed its
employees); Seay v. Travelers Indem. Co., 730 S.W.2d 774, 775, 780 (Tex. App.—
Dallas 1987, no writ) (fact issue existed as to whether insurance company that had
3
As noted previously, “Sojitz” was defined earlier in McNeil’s deposition by the
workers’ trial counsel as meaning a “Japanese organization” that was Metton’s
“parent company.” This definition does not accurately refer to either “Sojitz Japan,”
which is the only Japanese entity identified in the record, or SCA, which holds the
majority of Metton’s stock.
15
performed acts directly promoting insured’s interest in safety of its boilers had duty
to insured’s employee, who was killed when boiler malfunctioned).
Here, Sojitz’s training at the Metton LaPorte plant for shipment of hazardous
goods—a subject that for SCA, as a buyer and seller of resins, is within its
wheelhouse—is not the same as safety training for operating a resin manufacturing
plant. As to the Metton LaPorte plant operations, SCA’s corporate representative
Uesaka testified that “Metton ha[d] [its] own operation method” and “procedures,”
and SCA did not “give” Metton “any opinions or comments” about how Metton
operated its LaPorte plant. Uesaka’s testimony on this issue was uncontroverted.
Thus, McNeil’s testimony about classes for “shipment of hazardous goods” and
other unspecified classes does not raise a fact issue as to whether SCA assumed a
duty to provide the Metton LaPorte plant and its workers with safety training for
plant operations. See Nall, 404 S.W.3d at 555; Torrington Co., 46 S.W.3d at 838–
39.
The workers also argue that they raised a fact issue as to whether SCA
undertook a duty to provide the workers with a safe working environment because
Abe, who made the decision not to evacuate the Metton LaPorte plant on May 2,
2018, was assigned by “Sojitz Japan” to serve as the plant’s vice president. But no
evidence ties Sojitz Japan’s assignment of the Metton LaPorte plant’s upper
management to any conduct of SCA, and the mere fact that a corporation may be a
16
subsidiary does not automatically render it liable for the actions or obligations of its
parent. On the contrary, because Texas law presumes that even related corporations
are separate entities, “[t]he party seeking to ascribe one corporation’s actions to
another by disregarding their distinct corporate entities must prove this allegation.”
BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 798 (Tex. 2002); see also
SSP Partners v. Gladstrong Invs. (USA) Corp., 275 S.W.3d 444, 455 (Tex. 2008)
(“We have never held corporations liable for each other’s obligations merely
because of centralized control, mutual purposes, and shared finances. There must
also be evidence of abuse . . . .”).
For example, in Abdel-Fattah v. PepsiCo, Inc., the plaintiff—an employee of
PepsiCo’s wholly-owned subsidiary, Taco Bell—alleged that in hiring the chief
executive officer (“CEO”) and president of Taco Bell, PepsiCo undertook an
affirmative act that created a duty to use reasonable care in hiring Taco Bell’s
employees. 948 S.W.2d 381, 383, 385 (Tex. App.—Houston [14th Dist.] 1997, no
writ). According to the plaintiff, PepsiCo was negligent in hiring Taco Bell’s CEO
and president, and thus was liable for injuries inflicted on the plaintiff by a Taco Bell
employee who had been negligently hired during the CEO and president’s tenure.
Id. at 385.
Our sister appellate court acknowledged that the hiring of Taco Bell’s CEO
and president could be considered as an affirmative undertaking by PepsiCo for Taco
17
Bell’s benefit. Id. But because the hiring of an executive was not an undertaking
that directly promoted Taco Bell’s interest in providing a safe workplace, the court
concluded that it was not “an undertaking that would justify extending a legal duty
on the part of PepsiCo to oversee the daily management” of Taco Bell’s employees.
Id. Thus, the court held that there was no basis for imposing a legal duty on PepsiCo
to protect the plaintiff from an injury inflicted by a fellow Taco Bell employee. Id.;
see also Ross Stores, Inc. v. Miller, 612 S.W.3d 682, 690–91 (Tex. App.—Houston
[1st Dist.] 2020, no pet.) (absent showing of direct participation by parent company
in circumstances precipitating injury to employee of subsidiary, there was no basis
for concluding that parent company was required to protect subsidiary’s employee).
Similarly, here, Sojitz Japan’s selection of upper management, including Abe, for
the Metton LaPorte plant is no evidence that SCA exercised any control over the
Metton LaPorte plant’s operations or voluntarily undertook a duty to ensure that the
plant operated safely.
Because there is no evidence that SCA owed the workers a duty of care, we
hold that the trial court did not err in granting summary judgment in favor of SCA
on the workers’ claims against it.
We overrule the workers’ sole issue.
18
Conclusion
We affirm the order of the trial court.
Julie Countiss
Justice
Panel consists of Chief Justice Adams and Justices Countiss and Rivas-Molloy.
19