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Smart Summary

Factual and Procedural Background

This case arises from personal injuries caused by intoxicated patrons at the Cowboy Palace nightclub in Beaumont, Texas, during a promotional event known as "B-95 Ladies Night at the Palace," jointly conducted by radio station KZZB-95 FM (B-95) and the Palace. The event included advertising and live broadcasts by B-95, which promoted drink specials and encouraged patronage. On June 30, 1988, two intoxicated patrons, Michael Edward Poupart and Joseph Wayne Stephens, caused separate automobile accidents resulting in injuries to police officers James Riley and Mary Gray, who were directing traffic near the scene.

Riley and Gray sued the Palace, its bartender Dartez, and B-95/Triplex Communications, alleging liability under the Texas Dram Shop Act and theories of joint enterprise, civil conspiracy, and negligent promotion. The trial court found the Palace and Dartez liable but refused to submit jury questions on joint enterprise and negligent promotion regarding B-95, and submitted a civil conspiracy definition to which Riley and Gray objected. The jury found no civil conspiracy involving B-95. The trial court awarded damages against the Palace and Dartez but none against B-95. The court of appeals reversed the trial court's refusal to submit the requested questions and definitions and remanded. The Texas Supreme Court granted review and reversed the court of appeals, holding that B-95 could not be held liable under any of the three theories.

Legal Issues Presented

  1. Whether the radio station KZZB-95 FM may be held liable under the theory of joint enterprise for injuries resulting from the nightclub's violations of the Texas Dram Shop Act.
  2. Whether the trial court erred in refusing to submit plaintiffs' requested questions and definitions on civil conspiracy, and whether the submitted definition was proper.
  3. Whether a cause of action for negligent promotion exists against the radio station under the facts of this case.

Arguments of the Parties

Petitioner (Triplex Communications, Inc.)

  • Argued that the court of appeals erred in holding that joint enterprise liability was supported by the evidence, emphasizing the absence of an equal right to control the nightclub's operations.
  • Contended that the relationship with the Palace was an ordinary advertiser-client business, not a joint enterprise.
  • Asserted that the trial court properly refused to submit plaintiffs' civil conspiracy question and definition because civil conspiracy requires specific intent to accomplish an unlawful purpose or use unlawful means.
  • Maintained that no legal duty existed to support a negligent promotion claim, distinguishing this case from precedent involving broadcasts encouraging reckless behavior.

Respondents (Riley and Gray)

  • Argued for a broad definition of joint enterprise that encompassed all business dealings between the Palace and B-95, claiming this showed some control by B-95.
  • Contended that the civil conspiracy definition submitted was erroneous and that the tortfeasors needed only intend to engage in the conduct causing injury, not necessarily intend the unlawful result.
  • Relied principally on California precedent (Weirum v. RKO General Inc.) to support a negligent promotion claim, asserting that the radio station's promotions contributed to reckless behavior.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Exxon Corp. v. Perez, 842 S.W.2d 629 (Tex. 1992) Requirement that an issue must be supported by some evidence to be submitted to the jury. Applied to conclude that joint enterprise liability was unsupported by evidence and thus not submitable.
Moore v. Lillebo, 722 S.W.2d 683 (Tex. 1986) Standards for submission of jury questions. Supported the court’s refusal to submit unsupported jury questions.
Shoemaker v. Estate of Whistler, 513 S.W.2d 10 (Tex. 1974) Elements of joint enterprise, including the requirement of equal right to control. Used to analyze and reject joint enterprise liability due to lack of equal control.
Exxon Corp. v. Tidwell, 867 S.W.2d 19 (Tex. 1993) General right of control insufficient to impose liability. Supported finding that B-95’s general participation did not establish joint enterprise liability.
Massey v. Armco Steel Co., 652 S.W.2d 932 (Tex. 1983) Definition of civil conspiracy requiring unlawful purpose or unlawful means. Applied to reject plaintiffs’ broader definition of civil conspiracy lacking specific intent.
Carroll v. Timmers Chevrolet, Inc., 592 S.W.2d 922 (Tex. 1979) Reinforcement of civil conspiracy definition. Supported the court’s interpretation of civil conspiracy requiring unlawful intent or means.
Schlumberger Well Surveying Corp. v. Nortex Oil Gas Corp., 435 S.W.2d 854 (Tex. 1968) Intent requirement in civil conspiracy. Emphasized that one cannot agree to commit a wrong that he does not know of.
Reed Tool Co. v. Copelin, 689 S.W.2d 404 (Tex. 1985) Differentiation between negligent injury and intentional injury requiring specific intent. Supported rejection of civil conspiracy theory based on negligence alone.
Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523 (Tex. 1990) Requirement of legal duty for negligence claims. Applied to reject negligent promotion claim for lack of duty.
Verdeur v. King Hospitality Corp., 872 S.W.2d 300 (Tex.App. – Fort Worth 1994, writ denied) General rule that no duty exists to control third parties absent special relationships. Supported court’s refusal to impose negligent promotion liability.
Weirum v. RKO General Inc., 15 Cal.3d 40, 123 Cal.Rptr. 468, 539 P.2d 36 (1975) Liability for broadcaster encouraging reckless behavior. Distinguished and declined to apply, as B-95’s promotions did not incite reckless or unlawful conduct.

Court's Reasoning and Analysis

The Court analyzed each asserted theory of liability in turn. First, regarding joint enterprise, the Court acknowledged that while the plaintiffs pleaded joint enterprise and presented evidence of collaboration between B-95 and the Palace, there was no evidence that B-95 possessed an equal right to control the nightclub’s operations. The Palace retained exclusive control over admission, drink service, and pricing. Mere suggestions or promotional cooperation by B-95 did not amount to joint control, a necessary element for joint enterprise liability.

Second, on civil conspiracy, the Court emphasized that civil conspiracy requires specific intent to accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful means. The plaintiffs’ proposed jury question and definition improperly eliminated the requirement of specific intent by allowing a finding based on negligence alone. The Court reaffirmed its precedent that negligence cannot form the basis of civil conspiracy, and because the jury did not find civil conspiracy under the more lenient erroneous definition, any error was not dispositive.

Third, concerning negligent promotion, the Court noted that liability in negligence requires a legal duty, which generally does not extend to controlling the actions of third parties absent a special relationship. The plaintiffs’ reliance on Weirum was rejected because B-95’s promotions did not incite or encourage reckless or unlawful behavior to the degree necessary to impose such a duty. Therefore, the Court held that no duty existed to support negligent promotion liability.

In sum, the Court concluded that none of the three theories of liability—joint enterprise, civil conspiracy, or negligent promotion—were supported as a matter of law, justifying reversal of the court of appeals and affirming the trial court’s judgment in favor of B-95/Triplex.

Holding and Implications

The Court reversed the judgment of the court of appeals and ordered that the plaintiffs take nothing from Triplex Communications, Inc.

The direct effect of this decision is to absolve the radio station from liability for injuries caused by the nightclub’s violations of the Texas Dram Shop Act under the theories of joint enterprise, civil conspiracy, and negligent promotion. The Court’s ruling clarifies the limits of liability for entities indirectly associated with alcohol providers, reinforcing the necessity of specific intent for civil conspiracy and the requirement of control or duty for joint enterprise and negligent promotion claims. No new precedent was set beyond applying existing principles to the facts of this case.

TRIPLEX COMMUNICATIONS, INC. d/b/a Radio Station KZZB-95 FM, Petitioner, v. James R. RILEY, Mary Gray, and Deep East Texas Self Insurance Fund, Respondents.

SPECTOR, Justice, delivered the opinion of the Court, in which all Justices join.

In this cause we consider whether a radio station may be held liable under theories of joint enterprise, civil conspiracy, and negligent promotion for personal injuries resulting from a nightclub's violations of Texas' Dram Shop Act, TEX.ALCO.BEV. CODE § 2.02. The trial court refused to submit the plaintiffs' requested questions and definitions on joint enterprise, negligent promotion, and civil conspiracy. The court of appeals reversed and remanded, holding that the trial court abused its discretion by failing to submit the plaintiffs' tendered questions and definitions. 874 S.W.2d 333. Because we hold that the radio station may not be held liable for the tortious acts of the nightclub under any of the three theories, we reverse the judgment of the court of appeals and order that the plaintiffs take nothing from the radio station.

For about seven years, KZZB-95 FM (B-95), a Beaumont radio station, and the Cowboy Palace, Inc. (the Palace) collaborated on a weekly event known as "B-95 Ladies Night at the Palace." B-95 advertised that Thursday night was Ladies' Night at the Palace, meaning that women aged twenty-one years or older would be admitted at no charge. The Palace pre-screened the radio advertisements, except for occasional promotional spots that it could later change. Consistent with the law and at the Palace's request, B-95 indicated in its spots that persons aged eighteen to twenty would be admitted into the establishment. The Palace's Thursday night bar drinks were ninety-five cents, a price set to correspond with B-95's 95.1 FM frequency.

B-95 and the Palace worked closely to make "B-95 Ladies' Night" successful. The Palace sought to increase patronage and B-95 sought advertising revenue. Toward this end, B-95 assigned a disc jockey to the Palace for live remote broadcasts during Ladies' Night. The on-site disc jockey was responsible for making announcements over the public address system informing patrons of drink specials and other promotions. The announcements encouraged patrons to go to the bar. There was evidence that B-95's disc jockey witnessed people becoming intoxicated at the Palace and was aware of underage drinking at the club. Over the seven-year relationship, there were a number of other promotional activities, including the appearance of B-95's mascot, the "Super Bee," at the Palace during Ladies' Night.

On the evening of June 30, 1988, Michael Edward Poupart, an underage patron of the Palace, was served ten alcoholic beverages. After leaving the Palace on the evening in question, Poupart was involved in a serious automobile accident caused by his intoxication. The Beaumont police responded, and officers James Riley and Mary Gray were responsible for directing traffic off of the freeway approximately 300 to 400 yards north of the accident.

During that same evening, Joseph Wayne Stephens arrived at the Palace sometime between 8:30 and 9:00 P.M. Vernis T. Dartez, a Palace bartender, served Stephens either sixteen or seventeen mixed drinks. Stephens, a regular at the Palace, exhibited signs that he was highly intoxicated while he was being served alcoholic beverages.

Stephens was on his way home and travelling at a high rate of speed when his car hit another car that had stopped at the scene of Poupart's accident. Stephens' car ricocheted off the other car and struck Riley and Gray. Stephens' blood-alcohol content was later determined to be substantially above the legal limit, and it is undisputed that Stephens caused the accident.

Officers Riley and Gray brought this action against the Palace, Dartez, and B-95/Triplex. The trial court refused to submit Riley's and Gray's requested questions relating to joint enterprise and negligent promotion, and submitted a definition of civil conspiracy to which Riley and Gray objected. The jury found that the Palace and Dartez were liable under Chapter 2 of the Texas Alcoholic Beverage Code, but failed to find that Triplex and B-95 were engaged in a civil conspiracy with the Palace.

The trial court rendered judgment in favor of Riley, Gray, and an intervenor, Deep East Texas Insurance Fund (Riley's and Gray's workers' compensation carrier), in the amount of $1,410,837.43 — to be assessed jointly and severally against the Palace and Dartez. The court also awarded $100,000 in punitive damages against the Palace. Because the jury failed to find the existence of a civil conspiracy, and had no opportunity to consider questions on joint enterprise and negligent promotion, Riley and Gray took nothing from B-95. The judgments against Dartez and the Palace are not before this Court.

The court of appeals reversed the judgment of the trial court, concluding that the trial court erred by failing to submit questions on joint enterprise and negligent promotion, and that the civil conspiracy definition was defective.

I. Joint Enterprise

Triplex first argues that the court of appeals erred in holding that Riley and Gray were entitled to a jury question on the issue of joint enterprise. 874 S.W.2d at 326-47. We agree.

If an issue is properly pleaded and is supported by some evidence, a litigant is entitled to have controlling questions submitted to the jury. See Exxon Corp. v. Perez, 842 S.W.2d 629, 631 (Tex. 1992); Moore v. Lillebo, 722 S.W.2d 683, 686-87 (Tex. 1986); TEX.R.CIV.P. 278. Here, while Riley and Gray may have properly pleaded joint enterprise liability, the evidence adduced at trial was legally insufficient to support the submission of their tendered question.

Riley's and Gray's requested question asked whether B-95 and the Palace had: (1) an express agreement; (2) a common purpose; (3) a common pecuniary interest; and (4) an equal right to control the enterprise. See Shoemaker v. Estate of Whistler, 513 S.W.2d 10, 16-17 (Tex. 1974). Even if the evidence adduced at trial satisfied the first three prongs of this test, there is no evidence of an equal right to direct and control the enterprise to justify the imposition of joint enterprise liability.

We do not reach Triplex's argument that the Legislature has chosen to impose statutory civil liability on providers of alcoholic beverages, and not on persons who are not in control of the liquor supply. See TEX.ALCO.BEV. CODE § 2.03; Smith v. Sewell, 858 S.W.2d 350 (Tex. 1993). Nor do we reach Triplex's argument that defects in the jury question relating to the Palace's liability under the Dram Shop Act make it improper for liability to be imputed to Triplex.

Riley and Gray suggest that we define enterprise broadly, to encompass all of the business dealings between the Palace and B-95 relating to Ladies' Night. They argue that this expansive definition would reveal that B-95 exercised some control over the relationship, giving rise to some evidence of a joint enterprise. See Shoemaker, 513 S.W.2d at 15 (equal right of control means that each member of the joint venture must have an authoritative voice, or "must have some voice and right to be heard"); RESTATEMENT (SECOND) OF TORTS § 491 (1965). Triplex, on the other hand, prefers to characterize its relationship with the Palace as one in which a radio station, through advertising and promotions, conducted ordinary business with a client. Under either characterization, however, whether there was a joint business venture or a simple advertiser-client relationship, there is no evidence that B-95 had an equal right of control that would give rise to joint enterprise liability. See Exxon Corp. v. Tidwell, 867 S.W.2d 19, 23 (Tex. 1993) (general right of control insufficient to make defendant responsible for actor's criminal conduct in premises liability action).

To establish that B-95 exercised an equal right to control the business relationship, Riley and Gray place great emphasis on the fact that drink prices corresponded with B-95's FM frequency. Yet, it is undisputed that the Palace — not B-95 — set drink prices. Drinks were 95 cents on all nights except KYKR night, when they were 93 cents to correspond with that station's FM frequency.

The Palace, which was licensed to sell alcohol, maintained absolute control over the provision of all drinks. The proprietors of the Palace decided who was admitted and ejected from the Palace, controlled how much liquor was served and to whom it was served, and were best positioned to monitor the amount of liquor that patrons consumed. There was no evidence that B-95 had a contractual right of control, or exercised any right of control, over who was served, admitted, or ejected. Similarly, the Palace had no right to control the operation of the radio station.

At most, the evidence at trial indicated that B-95 could make suggestions that the Palace could adopt or reject. There was no evidence that B-95 had a voice in, or an equal right to control, the provision of the alcohol. The evidence of B-95's general participation in the event is legally insufficient to support the submission of a question regarding joint enterprise. See TEX.R.CIV.P. 278.

II. Civil Conspiracy

Riley and Gray contend, and the court of appeals agreed, that the definition of civil conspiracy submitted to the jury was erroneous because it required the jury to find that the parties "intended to accomplish an unlawful or negligent purpose or to accomplish a lawful purpose by unlawful or negligent means." 874 S.W.2d at 348. The gravamen of their argument is that the tortfeasors needed only to intend to engage in the conduct that resulted in the injury. We disagree; civil conspiracy requires specific intent. For a civil conspiracy to arise, the parties must be aware of the harm or wrongful conduct at the inception of the combination or agreement.

Riley and Gray requested the following question and definition regarding civil conspiracy:

At the time in question, were The Cowboy Palace, Inc. and Radio Station KZZB-95 FM engaged in a civil conspiracy in a course of conduct which resulted in the injuries to the Plaintiffs?
You are instructed that a "CIVIL CONSPIRACY" exists when two or more parties consciously or knowingly agree among themselves, or otherwise combine together to engage in a lawful purpose or known course of conduct, and perform some acts to implement the course of conduct by some unlawful means.
The term "unlawful means" may include negligence or the violation of a statute or law. It is not necessary that all co-conspirators engage in unlawful means.

The requested question and definition are inconsistent with this Court's prior decisions relating to civil conspiracy. See, e.g., Massey v. Armco Steel Co., 652 S.W.2d 932, 934 (Tex. 1983). This Court has repeatedly defined civil conspiracy as "a combination by two or more persons to accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful means." See id.; see also Carroll v. Timmers Chevrolet, Inc., 592 S.W.2d 922, 925 (Tex. 1979). The elements of the cause of action must be taken in the context of this basic definition stating that the object to be accomplished, or means by which accomplished, is unlawful. Massey, 652 S.W.2d at 934. The "gist of a civil conspiracy" is the injury that is intended to be caused. Schlumberger Well Surveying Corp. v. Nortex Oil Gas Corp., 435 S.W.2d 854, 856 (Tex. 1968). One "cannot agree, either expressly or tacitly, to the commission of a wrong which he knows not of." Id. at 857.

The trial court submitted the following question and definition on civil conspiracy to the jury:

At the time in question, were The Cowboy Palace, Inc. and Radio Station KZZB-95 FM engaged in a civil conspiracy which resulted in the injuries to the plaintiffs?
A "civil conspiracy" is a combination of two or more persons who agree between themselves to accomplish an unlawful or negligent purpose or to accomplish a lawful purpose by unlawful or negligent means. To establish a civil conspiracy, there must be a meeting of the minds on the object or course of conduct, one or more overt acts in furtherance of the conspiracy, and a preconceived plan and unity of design and purpose to engage in the course of conduct that results in an injury to another. (Emphasis added.)
This definition is also erroneous because it permitted the jury to find that the parties conspired to be negligent. Given the requirement of specific intent, parties cannot engage in a civil conspiracy to be negligent. See generally Reed Tool Co. v. Copelin, 689 S.W.2d 404, 406 (Tex. 1985) ("The fundamental difference between negligent injury, or even grossly negligent injury, and intentional injury is the specific intent to inflict injury."). The only precedent to the contrary comes from the Beaumont Court of Appeals. See Rogers v. R.J. Reynolds Tobacco Co., 761 S.W.2d 788, 796 (Tex.App. — Beaumont 1988, writ denied). We expressly disapprove of Rogers to the extent that it holds that there can be a civil conspiracy to be negligent. However, because the jury in the present case failed to find the existence of a civil conspiracy under the more liberal standard presented in the erroneous definition, any error in the definition is not dispositive in this case.

Thus, because Riley's and Gray's tendered question and definition would have improperly eliminated the intentional or knowing aspects of civil conspiracy, we hold that the trial court properly refused to submit them to the jury. See TEX.R.CIV.P. 278.

III. Negligent Promotion

Finally, Triplex argues that the court of appeals erred in recognizing a cause of action for negligent promotion. Under the circumstances of this case, we agree.

It is axiomatic that a legal duty must exist before a defendant may be held liable in negligence. See Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990). As a general rule, there is no legal duty in Texas to control the actions of third persons absent a special relationship, such as master/servant or parent/child. See Phillips, 801 S.W.2d at 525; Verdeur v. King Hospitality Corp., 872 S.W.2d 300, 301 (Tex.App. — Fort Worth 1994, writ denied); RESTATEMENT (SECOND) OF TORTS § 315 (1965).

To justify a departure from this rule, Riley and Gray rely principally on Weirum v. RKO General Inc., 15 Cal.3d 40, 123 Cal.Rptr. 468, 539 P.2d 36 (1975). In Weirum, a broadcaster encouraged motorists to pursue the radio station's promotional vehicle to different locations. The broadcasts indicated that the first persons to arrive at those locations would be rewarded with prizes. The broadcasts in Weirum were clearly calculated to incite and encourage imminent reckless behavior that exposed the plaintiffs in that case to an unreasonable risk of injury.

In the present case, there is no evidence that the promotions at issue were calculated to incite reckless or unlawful behavior. B-95's advertisements and promotions never approached the level of culpability at issue in Weirum, giving this Court no reason to depart from well-settled duty rules.

Accordingly, we hold that the trial court correctly refused to submit a question on the tort of negligent promotion.

* * * * * *

Because plaintiffs' requested question on joint enterprise was not supported by some evidence, we conclude as a matter of law that the trial court correctly refused to submit the issue of joint enterprise liability. Further, the trial court properly refused plaintiffs' tendered definition of civil conspiracy because the proposed definition was not substantially correct. Finally, the trial court correctly refused to submit a question on negligent promotion because, under the facts of this case, Triplex owed no duty to the injured officers. Consequently, we reverse the judgment of the court of appeals and order that Riley and Gray take nothing from Triplex.

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TRIPLEX COMMUNICATIONS INC. v. RILEY
(Jun 8, 1995)