Millsaps v. Continental Casualty Company et al

Filing 32

ORDER Overruling Objections and Adopting the 27 Report and Recommendation. The 10 Motion to Remand is granted. This case is therefore REMANDED to the 58th Judicial District Court of Jefferson County, Texas. Signed by District Judge Michael J. Truncale on 3/26/24. (KCV)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
BEAUMONT DIVISION
BRANDON MILLSAPS,
Plaintiff,
v.
CONTINENTAL CASUALTY COMPANY,
SHANNON NESTER,
Defendants.

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CIVIL ACTION NO. 1:23-CV-00147-MJT

JUDGE MICHAEL TRUNCALE

ORDER OVERRULING OBJECTIONS AND ADOPTING REPORT AND
RECOMMENDATION
On August 7, 2023, the Court referred Plaintiff Brandon Millsaps (“Millsaps”)’s Motion to
Remand [Dkt. 10] to United States Magistrate Judge Zack Hawthorn for consideration and
disposition.

[Dkt. 22].

On December 20, 2023, Judge Hawthorn issued his Report and

Recommendation, which recommends granting Millsaps’s Motion to Remand. [Dkt. 27]. On
January 3, 2024, Defendant Continental Casualty Company (“Continental”) filed Objections to the
Magistrate Judge’s Report and Recommendation. [Dkt. 28]. On January 11, 2024, Millsaps filed
his Response to Defendant’s Objections. [Dkt. 29].
A party who files timely written objections to a magistrate judge’s report and
recommendation is entitled to a de novo determination of those findings or recommendations to
which the party specifically objects. 28 U.S.C. § 636(b)(l)(c); FED. R. CIV. P. 72(b)(2)–(3). The
Court has conducted a de novo review of Judge Hawthorn’s Report and Recommendation and has
carefully considered Continental’s objections. The Court finds that Judge Hawthorn’s findings
and conclusions of law are correct and that Continental’s objections are without merit. Judge
Hawthorn correctly concluded that Continental did not meet its heavy burden of showing that

Millsaps has no reasonable possibility of recovery under Texas state law regarding his negligent
undertaking claim. The Court will discuss Continental’s objections in turn.
I.

DISCUSSION
1. Objection 1: Judge Hawthorn improperly applied a two-step analysis
regarding the existence of a duty for a negligent undertaking claim: (1) an
employee must owe an independent duty apart from his employer and (2) the
employee must be directly and personally involved in the negligent conduct.
First, Continental contends that Judge Hawthorn improperly analyzed the “independent

duty requirement” established by the Texas Supreme Court in Leitch v. Hornsby, 935 S.W.2d 114,
117 (Tex. 1996). [Dkt. 28 at 4, ⁋ 7]. Continental contends that “nowhere in Leitch is there any
suggestion that an employee’s personal involvement satisfies the requirement that the employee
‘owe an independent duty of reasonable care to the injured party apart from the employer’s duty.’”
Id.

Specifically, Continental contends that Judge Hawthorn improperly concluded that “an

employee’s personal involvement always creates a separate and independent duty owed by the
employee,” whereas the proper analysis of the rule announced in Leitch requires a two-step
analysis. Id. First, “the employee must owe an independent duty apart from his employer,” and
second, “the employee must be directly and personally involved in the negligent conduct.” Id. at
4–5. Continental contends that Judge Hawthorn improperly conflated this “two-step analysis” into
a single element. [Dkt. 28 at 5, ⁋ 7].
The Court finds that Judge Hawthorn’s analysis of the independent duty rule under Texas
law is correct. The Court also finds that Continental is incorrect that Leitch establishes a “twostep analysis.” Judge Hawthorn correctly stated that in Leitch, the Texas Supreme Court held that
“[a] corporate officer or agent can be liable to others, including other company employees, for his
or her own negligence. However, individual liability arises only when the officer or agent owes
an independent duty of reasonable care to the injured party apart from the employer’s duty.” [Dkt.
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27 at 7‒8] (citing 935 S.W.2d at 117). In Leitch, the employee-defendants owed no independent
duty to the plaintiff because the duty to provide a safe workplace—the basis for liability there—is
a non-delegable duty owed only by the employer. Id. at 118. The duty to provide a safe workplace
could only attach to the employer, and thus, the court’s holding was not affected by whether the
employee-defendants were personally involved in the alleged tortious conduct. While Leitch
generally establishes the independent duty rule, it does not address whether an employee’s
personal involvement in allegedly tortious conduct affects whether an independent duty of care
exists. Thus, Leitch does not demand the “two-step analysis” Continental suggests.
Judge Hawthorn correctly noted that “[i]t is well-established under Texas law that ‘a
corporation’s employee is personally liable for tortious acts which he directs or participates in
during his employment.’” [Dkt. 27 at 7] (citing Leyendecker & Assocs., Inc. v. Wechter, 683
S.W.2d 369, 375 (Tex. 1984)). Additionally, Judge Hawthorn correctly identified several federal
district court cases interpreting this rule and finding that an independent duty of care may arise
where an employee is personally involved in the conduct allegedly causing injury. Id. at 8‒9.
Millsaps alleged that “Texas common law” was one source of the duty that Nester owed to him.
Id. at 6. Millsaps also alleged that Nester personally conducted the inspection on the boiler at
Marshall Middle School. Id. at 9–10. Based on these allegations, Judge Hawthorn correctly
concluded that Nester potentially owed an independent duty of care to Millsaps under Texas
common law. Id. at 10.
In assessing Continental’s improper joinder arguments, the Court does not definitively
conclude whether a duty exists. Rather, the Court evaluates whether Continental has met its heavy
burden to show improper joinder: Continental must demonstrate that “there is no possibility of
recovery by the plaintiff against an in-state defendant.” Smallwood v. Illinois Cent. R. Co., 385

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F.3d 568, 573 (5th Cir. 2004) (emphasis added). The cases interpreting Texas law identified by
Judge Hawthorn in his Report show that there is at least some reasonable possibility that a court
could find that Nester owed personal duties to Millsaps arising out of the inspection he personally
undertook, independent of Continental’s duties. A reasonable possibility of the existence of a duty
is sufficient to defeat Continental’s allegations of improper joinder. The Court agrees with Judge
Hawthorn’s conclusion that Continental has failed to meet its burden of showing that Millsaps has
no possibility of recovery under a negligent undertaking theory. Accordingly, Continental’s first
objection is overruled.
2. Objection 2: Any duty owed by Nester was dependent on and derivative of
Continental’s duty, not an independent duty apart from the employer’s duty
as required by Leitch.
Second, Continental contends that Judge Hawthorn improperly relied on Millsaps’
allegation that Nester “personally conducted the inspection on the boiler in Marshall Middle
School” as evidence that Nester owed a separate and independent duty. [Dkt. 28 at 5, ⁋ 8].
Continental contends that the proper conclusion was that any duty owed by Nester was necessarily
derivative of his employer’s duty. Id.
Judge Hawthorn correctly identified several cases holding that a personal duty may arise
for an employee whose personal conduct directly causes injury. The Court agrees with Judge
Hawthorn’s conclusion that the facts here establish the possibility that an independent duty of care
exists under Texas law. Because the facts alleged in Millsaps’ state court petition and the cases
identified by Judge Hawthorn establish this possibility, the Court agrees that Continental has failed
to meet its burden to show improper joinder.
Additionally, Continental identifies a recent Fifth Circuit case not addressed in Judge
Hawthorn’s Report. Continental contends that in Guijarro v. Enterprise Holdings, Inc., though the
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employee was personally involved in the conduct at issue, the employee’s duty flowed from being
the company’s agent and was thus not independent of the employer’s duty. [Dkt. 25 at 5, ⁋ 8]
(citing 39 F.4th 309, 315 (5th Cir. 2022)). Continental correctly states the holding in Guijarro, but
this holding does not overrule the multiple cases identified in Judge Hawthorn’s report finding that
an employee’s personal involvement in conduct causing injury suggests the possibility of an
independent duty.
In Guijarro, the defendant-employee worked for a rental car company and was responsible
for renting a car to the plaintiff. Id. at 312–13. The plaintiff was later injured in a collision
allegedly due to the rental car’s faulty brakes. Id. at 312. The defendant-employee was a customer
service representative who handled the rental transaction and did not personally service the
vehicle’s brakes, which was the source of the negligence claim. Id. at 313. Therefore, the
defendant-employee did not have an independent duty to the plaintiff apart from their employer’s
duty based on facilitating the rental transaction alone. Id. at 313, 315. This is distinguishable from
the facts here, where Millsaps alleged that Nester personally conducted the boiler inspection,
which is the source of his negligent undertaking claim. Guijarro does not alter Judge Hawthorn’s
conclusion regarding the possibility that an independent duty exists here under Texas common law.
Accordingly, Continental’s second objection is overruled.
3. Objection 3: Judge Hawthorn failed to identify conduct by Nester that is
different from the conduct forming the basis of Continental’s liability.
Third, Continental contends that Judge Hawthorn’s conclusion “about Nester’s personal
involvement is based simply on Plaintiff’s allegation that Nester personally performed the boiler
inspection, which is the same basis as the claim against Continental.” [Dkt. 28 at 5, ⁋ 9].
Continental further contends that “[a] petition that alleges identical negligence by both the
employee and employer does not allege a sufficient cause of action against the employee” and cites
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two federal district court cases and one Texas appellate court case for this proposition. Id. at 5‒6.
These cases establish no such rule, and each case cited by Continental is distinguishable from the
facts here.
First, in Scheaffer v. Albertson’s, LLC, the plaintiff was a repairman working on a
refrigeration system in a grocery store who sued the store’s maintenance supervisor after a pipe in
the store ruptured and severely injured him. No. CV H-21-2326, 2021 WL 4822159, at *1 (S.D.
Tex. Oct. 15, 2021). The plaintiff there made no allegation that the maintenance supervisor was
personally involved in the alleged tortious conduct.

Rather, the plaintiff alleged that the

supervisor’s “inaction and lack of oversight” led to his injuries. Id. This is not the same type of
personal involvement in the tortious conduct alleged by Millsaps or in the cases identified by Judge
Hawthorn.
Second, in Fields v. Brown, the plaintiffs were employees of a meatpacking plant and sued
their employer and three supervisory employees, alleging unsafe practices that led to the plaintiffs
contracting COVID-19. No. 6:20-CV-00475, 2021 WL 2819762, at *1 (E.D. Tex. Feb. 11, 2021).
The court held that the employer owed a non-delegable duty to provide a safe workplace for its
employees, and therefore, the supervisory employee-defendants could not be held liable because
this duty ran only to the employer. Id. at *3. Thus, just as in Leitch, it did not matter whether the
supervisory employee-defendants were personally involved in the alleged tortious conduct because
the duty at issue could not possibly have extended to them. Fields does not assess the type of
personal involvement in alleged tortious conduct that Millsaps has alleged here.
Finally, in In re Butt, the plaintiff sued a grocery store and four of its corporate officials
for negligence after the plaintiff slipped and fell while shopping at the grocery store. 495 S.W.3d
455, 458 (Tex. App.—Corpus Christi-Edinburg, 2016, no pet.). The court held that the corporate

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officials did not owe an independent duty of care to the plaintiffs because the plaintiff did not
allege that the corporate officials committed tortious acts “or that they personally created the
allegedly dangerous condition at issue . . . a wet floor.” Id. at 466. Unlike the plaintiff in In re
Butt, here, Millsaps alleged that Nester personally committed negligence when conducting the
inspection of the boiler.
At best, these cases identified by Continental further highlight the ambiguity in Texas law
recognized by Judge Hawthorn in his Report: “Courts ‘distinguish between cases controlled by
Leitch and Tri—where a supervisor who played no direct and personal role in the challenged
conduct is sued—and those in which a personal duty arises—where the joined employee was
directly and personally involved in the alleged tort.’” [Dkt. 27 at 8]. Regardless of whether
Millsaps’ negligent undertaking claim is ultimately viable, the fact that a reasonable possibility of
recovery exists under the “personal involvement” line of cases identified by Judge Hawthorn
means that Continental has not met its burden in showing improper joinder. Furthermore, it is
well-established in the Fifth Circuit that any “contested factual issues and ambiguities of state law”
must be resolved in favor of remand. Allen v. Walmart Stores, L.L.C., 907 F.3d 170, 183 (5th Cir.
2018). The Court finds that there is sufficient ambiguity in Texas law regarding whether an
independent duty exists based on the facts alleged by Millsaps to warrant remand of this case.
Accordingly, Continental’s third objection is overruled.
4. Objection 4: Judge Hawthorn’s analysis is inconsistent with the Court’s
application of the Leitch principles in Dougay v. Dolgencorp of Texas, Inc.
Fourth, Continental contends that Judge Hawthorn’s Report is inconsistent with this
Court’s application of the Leitch principles in Dougay v. Dolgencorp of Texas Inc., No. 1:19-CV00419, 2019 WL 13141530, at *2 (E.D. Tex. Nov. 21, 2019). [Dkt. 28 at 6, ⁋ 10]. This is incorrect.
Dougay is distinguishable from the facts here because in that case, the plaintiff sued a store
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manager for negligence after the plaintiff slipped and fell at the store. Id. at *1. The plaintiff
alleged the manager was negligent in training and managing employees but did not allege that the
manager was personally involved in handling the shopping cart that the plaintiff tripped over. Id.
at *3. In fact, the manager was not even present at the store during the alleged incident. Id. at *1.
Thus, this Court found that the defendant manager owed no independent duty to the plaintiff. Id.
at *3. In contrast, here, Millsaps has alleged that Nester personally conducted the boiler inspection
that forms the basis of his negligence claims. Accordingly, Continental’s fourth objection is
overruled.
5. Objection 5: Millsaps’ claims against Nester do not satisfy the Leitch and Tri
standards for employee liability because Nester did not have direct contact or
provide a service directly to Millsaps.
Fifth, Continental contends that because Continental and Nester provided boiler inspection
services to Beaumont Independent School District (“BISD”), and not Millsaps directly, Millsaps’
allegations do not satisfy the Leitch and Tri standards for employee liability. [Dkt. 28 at 8, ⁋ 13].
Continental does not cite any binding authority for the proposition that an employee-defendant
must provide services directly to a plaintiff for an independent duty to attach, nor can the Court
locate any such authority. Accordingly, Continental’s fifth objection is overruled.

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II.

CONCLUSION
In conclusion, the Court finds that the findings of fact and conclusions of law of the United

States Magistrate Judge are correct. It is, therefore, ORDERED that Judge Hawthorn’s Report and
Recommendation granting Plaintiff’s Motion to Remand [Dkt. 27] is ADOPTED. Accordingly,
Plaintiff’s Motion to Remand [Dkt. 10] is GRANTED. This case is therefore REMANDED to the
58th Judicial District Court of Jefferson County, Texas.
SIGNED this 26th day of March, 2024.

____________________________
Michael J. Truncale
United States District Judge

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