Denise Stroup, as Legal Guardian of D. L. S., an Incapacitated Person v. MRM Management, Inc. ( 2018 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-17-00534-CV
Denise Stroup, as Legal Guardian of D. L. S., an Incapacitated Person, Appellant
v.
MRM Management, Inc., Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 53RD JUDICIAL DISTRICT
NO. D-1-GN-17-003290, HONORABLE KARIN CRUMP, JUDGE PRESIDING
MEMORANDUM OPINION
This is an appeal from a take-nothing summary judgment rendered by the district
court of Travis County in a personal injury suit. Appellant is Sandra Denise Stroup (Stroup), Guardian
for her brother Douglas Lee Stroup, and appellee is MRM Management, Inc. (MRM).1 The issue
concerns the vicarious liability vel non of MRM for the negligent acts of Penny Harrington Taylor.
Taylor and Douglas Lee Stroup were involved in an automobile-motorcycle crash on
east Oltorf Street in Austin in August 2015. Immediately before the collision, Taylor drove her car
from the driveway of La Quinta Inn onto eastbound Oltorf attempting to turn left onto westbound
Oltorf. At that time, Douglas Stroup was operating his motorcycle east on the inside lane of Oltorf.
The motorcycle struck the driver’s side of Taylor’s car. Stroup sued Taylor asserting that Taylor’s
negligence proximately caused her brother to suffer severe personal injuries.
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Keller Williams Realty is the trade name for MRM.
Stroup pleaded further that Taylor was a licensed real-estate salesperson associated
with MRM and that at the time of the collision, Taylor was engaged in real-estate sales activities.
Stroup claimed that MRM was vicariously liable for Taylor’s tortious conduct pursuant to principles
of (1) respondeat superior; (2) principal-agent liability; (3) joint enterprise; and (4) by operation of
law pursuant to the Texas Occupations Code.
Before the collision, Taylor had listed for sale a house located on Crest Avenue,
which was owned by her husband. To make the house more attractive, she planned to do some
landscaping. She engaged her friend Lynn Crossett, a landscape contractor, to do the work. At the
time, she and Crossett were carrying on an affair. On the morning of the collision, she and Crossett
breakfasted together and then went to Home Depot where she bought supplies for the job. They then
took a room at La Quinta Inn on Oltorf. She paid for the room with her credit card. Taylor testified
on deposition that Crossett needed to stay at the motel for several nights to do the Crest Avenue job
and other work located nearby.
At some point, Taylor decided to move her car to a shaded area. At that time, she
noticed that the car was dusty and decided to drive to a car wash. As she pulled onto Oltorf, the
collision occurred.
After discovery, MRM filed a traditional and no-evidence motion for summary
judgment, maintaining that it was not vicariously liable for Taylor’s conduct because at all times
relevant, Taylor was acting as an independent contractor. After hearing, the district court rendered
a take-nothing summary judgment.2
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After the district court rendered summary judgment, Stroup settled with Taylor.
2
If there is no contract between the parties constituting one of them as an independent
contractor, the courts recognize several factors to aid in making that determination, namely, (1) the
independent nature of the business; (2) his obligation to furnish necessary tools, supplies and
materials to perform the job; (3) his right to control the progress of the work except as to final
results; (4) the time for which he is employed; and (5) the method of payment whether by the time
or the job. Pitchfork Land & Cattle Co. v. King, 346 S.W.2d 598, 603 (Tex. 1961). Right of control
is the most important of these factors in determining whether a master-servant relationship rather
than an independent-contractor relationship exists. St. Joseph Hosp. v. Wolff, 94 S.W.3d 513, 542
(Tex. 2002).
A contract expressly providing that a person is an independent contractor is, however,
determinative of the relationship absent evidence that the contract is a mere sham or subterfuge
designed to conceal the true legal status of the parties or that the contract has been modified by a
subsequent agreement between the parties. Newspapers, Inc. v. Love, 380 S.W.2d 582, 588–90, 592
(Tex. 1964); Farlow v. Harris Methodist Fort Worth Hosp., 284 S.W.3d 903, 911 (Tex. App.—Fort
Worth 2009, pet. denied); Bell v. VPSI, Inc., 205 S.W.3d 706, 713 (Tex. App.—Fort Worth 2006,
no pet.).
Stroup does not contend, nor does the summary-judgment record show, that the
contract between the parties was modified or changed by a subsequent agreement between the
parties. See Newspapers, 380 S.W.2d at 584.
Taylor’s status as an independent contractor is expressly established by the terms of
the parties’ contract. The contract is entitled “Independent Contractor Agreement.” The first paragraph
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provides that the “Licensee [sic]” MRM “engages Agent [Taylor] as an independent contractor to
assist clients of the Market Center [MRM] with the purchase and sale of real estate.” Paragraph 2A
allows that Agent (Taylor) understands that she is entering into the Agreement as an independent
contractor and not as an employee. Paragraph 2A states further that “Agent’s [Taylor’s] independent
contractor status will define the parties’ relationship despite any contrary designation that appears
in Agent’s [Taylor’s] real estate license.”
Other summary-judgment proof confirms her status as an independent contractor.
She worked as much or as little as she wanted. In the eight years before the collision, she handled
only a few completed sales. She received payment only when a sale of property closed. Taxes were
not withheld from any commissions paid by MRM. Taylor provided her own “tools,” namely, her
own car, business cards, yard signs, lock boxes, and marketing materials. She paid for some, if not
all, of her associate training. The contract required agents to pay for access to the MRM Intranet
and email system. She also paid for her licensing and association fees.
Stroup does not rely on extrinsic summary-judgment evidence to show that the
parties’ contract was a sham or subterfuge. See id. Instead, she contends that other terms of the
contract and MRM’s manual of Policies and Guidelines raise fact issues as to whether the “true”
contract created a master-servant relationship. In that connection Stroup emphasizes Section 4.9.1.14
of the manual of Policies and Guidelines:
4.9.1.14 Dress Policy
It is important that everyone who associates with and represents
Keller Williams Realty do so in a professional manner. Associates
should conduct themselves properly in public, keep their car clean,
drive courteously and maintain a well-groomed appearance.
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Appearance is the single most important impression factor you have.
It is important to be well-groomed from a well-kept hairstyle down to
ones shoes. We are professionals; our manner and appearance should
reflect this at all times. This dress code should include coming into
a Market Center on an associate[’s] day off.
(Emphases supplied.)
Stroup regards this section as particularly relevant because Taylor’s deposition
testimony was that she was looking for a car wash when the collision occurred. In the briefing,
Stroup claims that this section “requires” Taylor to keep her car clean, and, as such, is an example
of MRM’s right of control over her.
We do not agree. Jessica Tenant, an administrative employee of MRM, testified on
deposition that MRM cannot tell its real estate agents how to act, what to do, and how to run their
business, but MRM can “coach” them into being “more professional.” To her recollection, no agent
has been terminated for violation of MRM’s policies and guidelines.
Section 4.9.1.14 does not “require” an agent to keep her car clean. Rather, it provides
that her car “should” be clean as part of presenting a “well-groomed appearance.” Appearance, we
are told, is the single most important impression factor an agent has. By the section, MRM hopes
to assist the agent become a more successful sales person of real estate.
Recognizing that the parties’ independent-contractor agreement presents a formidable
obstacle to recovery, Stroup argues that it is in conflict with the Texas Real Estate License Act,
see generally Tex. Occ. Code §§ 1101.001–.806 (“the Act”), and therefore void. Stroup claims
that Section 1101.803 creates a master-servant relationship between the supervising broker and its
sales agent, as a matter of law:
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A licensed broker is liable to the commission, the public, and the broker’s clients for
any conduct engaged in under this chapter by the broker or by a sales agent associated
with or acting for the broker.
Id. § 1101.803.
Stroup acknowledges that she has found no Texas authority supporting her argument,
and we see nothing in the Act expressly or impliedly prohibiting a person sponsored by or associated
with a broker from being classified as an independent contractor.
The purpose of the Act is to eliminate or reduce fraud that might be caused by
unlicensed, unscrupulous, or unqualified persons or entities that engage in the real estate business.
See Henry S. Miller Co. v. Treo Enters., 585 S.W.2d 674, 675–76 (Tex. 1979); Justice v. Willard,
538 S.W.2d 651, 653 (Tex. Civ. App.—Amarillo 1976, no writ). Its purpose is not to hold brokers
responsible for damages resulting from an accident caused by their sales agent when she was not
engaged in the selling of real estate at the time of the accident.
Stroup argues finally that MRM failed to conclusively negate joint-enterprise liability.
The elements of a joint enterprise are that the parties have (1) an express or implied agreement;
(2) a common purpose; (3) a community of pecuniary interest; and (4) “an equal right to a voice in
the direction of the enterprise, which gives an equal right of control.” St. Joseph Hosp., 94 S.W.3d
at 525–26.
MRM maintains that at least two elements of a joint enterprise are missing in its
relationship with Taylor: (1) a community of pecuniary interest, and (2) an equal right to a voice in
the direction of the enterprise which gives an equal right of control.
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More than a shared business purpose is required for “a community of pecuniary
interest” to exist. Blackburn v. Columbia Med. Ctr. of Arlington Subsidiary, L.P., 58 S.W.3d 263,
276 (Tex. App. —Fort Worth 2001, pet. denied). The court in Blackburn found that the lack of
evidence to “show a sharing of resources, pooling of funds, monetary investment, costs or benefits
to either party” demonstrated no more than a general business interest and convenience to the parties.
Id. at 266–67.
Here there is no summary-judgment evidence that MRM or Taylor shared resources,
pooled funds, or jointly made monetary investments involving properties Taylor listed or sold
through MRM. Instead, Taylor paid a portion of her commission from completed transactions to
MRM in exchange for having her license sponsored by MRM and for allowing her the opportunity
to take advantage of training, the office, and software programs offered by MRM to manage her
real estate business.
And MRM did not have an equal voice or equal right to control the manner in
which Taylor managed her listings or sold properties. As discussed previously, Taylor was not
contractually bound to keep her car clean. Rather the policies and guidelines manual merely suggested
that agents keep their cars clean as a part of MRM’s dress policy.
The summary judgment is affirmed.
__________________________________________
Bob E. Shannon, Justice
Before Justices Puryear, Toth, and Shannon*
Affirmed
Filed: October 18, 2018
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* Before Bob E. Shannon, Chief Justice (retired), Third Court of Appeals, sitting by assignment.
See Tex. Gov’t Code § 74.003(b).
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