Courtroom Success: Bobby Hood and Ray Persons

IADC member, Bobby Hood, along with Jamie Hood of the Hood Law Firm, and Ray Persons and Matt Harman of King & Spalding recently won an appeal for Texaco, Inc. in a case closely followed by franchisors throughout the United States and the business community in South Carolina. The South Carolina Supreme Court reversed a jury verdict in favor of a passenger catastrophically injured and rendered a quadriplegic in a single car accident and held that Texaco, Inc. was entitled to a directed verdict on the issue of actual agency. The jury awarded the Plaintiff $30 million which the trial court reduced to $27 million based upon the jury’s assessment of 10% comparative fault by the Plaintiff. The Plaintiff alleged that the accident was a result of the driver becoming intoxicated from alcohol illegally sold to him at a Texaco branded service station. Throughout the pretrial, trial, post-trial and appellate stages of the case, Texaco maintained that it was not vicariously liable for the conduct of the independently owned and operated store. The Plaintiff asserted that the branding requirements, the enrollment in a mystery shopper program and the brandishing of the Texaco emblem and customer service telephone number evidenced a degree of control beyond that of an ordinary franchisor/franchisee relationship. In a unanimous decision, the South Carolina Supreme Court concluded that there was no evidence to support a conclusion that Texaco had the right or power to control the store in the performance of its retail alcoholic beverage sales or in the manner in which that work was done and held that Texaco was entitled to a directed verdict.
The significance of the legal issues presented was evident by the number of amicae briefs that were filed. The IADC, through the diligent efforts of Randy Roach, Roach & Newton, and past president Will Cleveland, Buist, Moore Smythe & McGee, filed an amicus brief to highlight the significant impact that such a verdict, if sustained, would have on business relationships across the state. IADC member, John T. Lay, Ellis Lawhorne & Sims, also filed an amicus brief on behalf of the Chamber of Commerce, the American Tort Reform Association and the National Federation of Independent Legal Foundation.