Metroplex Mailing
Servs., LLC v. RR Donnelley & Sons Co.
Dallas Court of Appeals, No. 05-12-00267-CV (September 17,
2013)
Justices Lang, Myers, and Evans (Opinion)
Following trial court litigation that lasted longer than the parties’ agreement, the Court of Appeals affirmed a breach-of-contract judgment against a presort mailing company and an award of attorney’s fees more than thirteen times the contract damages. But the Court reversed judgment against the LLC’s sole member for lack of evidence to support piercing the corporate veil.
In May 2008, Metroplex entered into an agreement with Bowne & Co. to sort mail for Bowne’s Dallas customers for five years. The volume of business did not meet expectations, and Bowne asserted Metroplex did not satisfy contractual performance standards. Bowne terminated the contract in January 2009 and sued for breach of contract and other claims. Almost three years later, a jury found Metroplex had breached the contract; the trial court awarded $40,391 in damages and $538,358 in attorney’s fees against Metroplex and its sole member, Marion.
On appeal, the Court held there was legally sufficient evidence to support the judgment against Metroplex, including the attorney’s fees award. It was appropriate to include fees incurred in connection with a related mandamus proceeding as part of trial preparation fees. The Court dismissed concerns that the attorney’s fees were disproportionate to the actual damages, and held that the Texas Supreme Court’s holding in El Apple did not mandate that all attorney’s fees recoveries in Texas be governed by the “lodestar” approach.
The Court of Appeals held, however, that there was no evidence that Marion used Metroplex to perpetrate an actual fraud for his direct personal benefit, as required to pierce the corporate veil and hold him personally liable for the company’s actions. Personal liability for the actions of a company cannot be predicated solely on evidence that the company was used as an alter ego or a sham, absent “dishonesty of purpose or intent to deceive.”
