Most everyone living in a major media market in Texas has seen State Senator Wendy Davis’s first statewide campaign ad released during the first week of August claiming that Texas Attorney General and gubernatorial candidate Gregg Abbott sided with a company who hired a sexual predator and against a sexual assault victim. The best way to understand this case is to begin with the cast of characters.
• First, there is the Scott Fetzer Company which, in 1992, was doing business in Texas as Kirby Vacuum.
• Second, there is the San Antonio-based Sena Kirby Company which, in 1992, was a Kirby distributor owned by Leonard Sena.
• Third, there is a sex-offender named Mickey Carter who was recruited by the Sena to be a Kirby dealer (salesperson).
• Finally, there is Kristi Read, a married mother with children.
The Kirby Company (Kirby) is a manufacturer of vacuum cleaners and other accessories based in Cleveland, Ohio. It is a division of the Scott Fetzer Company which is owned by Warren Buffett’s Berkshire Hathaway, a multinational conglomerate holding company. For most of the past century, Kirby products have been sold door-to-door through in-home demonstrations. These products are exclusively marketed by independent distributors who operated pursuant to a “Kirby Independent Distributor Agreement.” These independent distributors are required to recruit salespeople known as “dealers” who go door-to-door to conduct the in-home demonstrations and installation of any products manufactured by the Kirby Company.
In a December 31, 1998 decision, the Texas Supreme Court described Mickey Carter’s relationship as that of “an independent contractor subject to a ‘Kirby Independent Dealer Agreement.’” The Sena Kirby Company (Sena) did not conduct any kind of background check on Carter prior to hiring him, and according to a May 1, 1997 decision by the Third Court of Appeals of Texas, Kirby did not “require its distributors to conduct background checks on prospective dealers.”
In his employment application with Sena, Carter listed three references and three prior places of employment. The Supreme Court pointed out that had Sena checked, it “would have found that women at Carter’s previous places of employment had complained of Carter’s sexually inappropriate behavior. Sena also would have found that Carter had been arrested and received deferred adjudication on a charge of indecency with a child, and that one of the previous employer’s records indicated that Carter had been fired because of that incident.”
Further, the Court of Appeals pointed out that this particular employer’s file contained a copy of a confession Carter had given to the police after his arrest on the child sex offense. The confession stated:
“First I want you to know I have a problem. I need help. I was in [a] psychiatric ward when I was in the Army. I have this thing in my mind that controls me at times. I can’t help what I do. Like I go outside naked. I expose myself. I do things that I do not have control of … I know I need help. I want someone to help me. Please, have them get me some help.”
Undeniably, Carter had psychological problems with sexuality, and his sexual proclivities were well known in his immediate community. Carter and his wife had been evicted from a number of apartments because of what the Court of Appeals called “sexually inappropriate conduct.” People living in the apartment complex where Carter lived at the time he was hired by Sena were aware that he had exposed himself to two young girls living in that complex. In fact, one of the references Carter placed on the Sena employment application was aware of these incidents and other examples of Carter’s inappropriate sexual conduct.
Sena did not contact this reference prior to hiring Carter.
In March 1993, Carter scheduled an “in-home demonstration” with Kristi Read, the mother of two children. For reasons not explained in either opinion by the Supreme Court or Court of Appeals, Carter had several contacts with Read. One morning he brought donuts to the Read residence after which he followed the mother to a playground where he played with the mother’s daughter. That afternoon Carter returned to the residence where he sexually assaulted her while her children were taking an afternoon nap.
Read and her husband sued Kirby, Sena, and Carter for negligence and gross negligence. The claims against Carter were “non-suited” before the trial began. A jury ultimately returned a verdict awarding the Reads $200,000 in actual damages and $1,500,000 in exemplary (punitive) damages. The jury found Kirby 80 percent negligent and Sena and Read 10 percent negligent, respectively. It can reasonably be assumed that Read’s negligence was based on her having non-sales contact and conversations with Carter. In any event, the trial court reduced the actual damages to $160,000 and the exemplary damages to $800,000. Kirby appealed these damage awards to the Court of Appeals. The appeals court upheld the actual damages award and reversed the exemplary damages award.
Between 1920 and 1993, there had been three sexual assaults by Kirby dealers during “in-home demonstrations.” The Kirby Company was aware of these assaults, and thus had some foreseeable risk—albeit minimal—that sexual assaults could occur during its in-home demonstrations. The Court of Appeals put it this way: Kirby had “knowledge of the peculiar risk of sending persons of unknown backgrounds into private homes, a knowledge arising in part from Kirby’s specific awareness of prior assaults by Kirby dealers.”
The Read lawsuit presented the claim that while Kirby did not have a duty to screen, train and supervise its dealers, the company had a duty inherent in its “direct contractual relationship with its distributors,” to take “reasonable precautions” in the manner in which the distributors hired dealers. Underlying this duty was whether Kirby had control over Sena sufficient to be what’s called “vicariously liable” for any injury caused by the independent contractor.
The Court of Appeals said this inquiry rested on who had specific control over the safety and security of the Read residence rather than on who had general right of control over the in-home demonstrations at the residence.
“ … Kirby retained the right to control precisely where and how its products were to be sold—through personal in-home demonstrations,” the court said. “After retaining this control in the present case, Kirby failed to take any precautions regarding Sena’s activity on recruiting dealers to perform such demonstrations. Because Kirby retained the right to control where and by what method its distributors and dealers sold Kirby products, and because it was this aspect of the marketing process that gave rise to the risk of harm to homeowners, we conclude Kirby had a duty of care toward Read …”
This reasoning formed the basis for the Court of Appeals’ finding that Kirby acted negligently and, therefore, Read was entitled to actual damages. The court, however, said this negligence did not amount to gross negligence, and thus, Read was not entitled to exemplary damages. The court’s decision was unanimous. Six justices on the Texas Supreme Court agreed with the finding by the appeals court. Three justices, including Abbott, did not.
Justice Nathan L. Hecht, joined by Justice Priscilla Owen, wrote a more extensive dissent than the court’s majority opinion, calling it an “aberrational and therefore not of much concern.” Abbott’s dissent, also joined by Justice Owen, was less detailed. His dissent was summed up in its opening paragraph:
“Kirby retained control over where the work was to be performed, not over who was to perform that work. Failure to require background checks of potential dealers relates to who the dealer is, not where the dealer works. As a result, the requisite relation between the control retained and the alleged injury is missing. Because the court holds to the contrary, I dissent.”
In response to the Davis ad, Abbott supporters have said the attorney general’s dissent was based on the law. Nine justices disagreed with him. We believe, however, that Abbott’s dissent was strictly a “pro-business” ruling. Despite being a significant beneficiary of tort litigation, Abbott has a legal history, with the use of so-called “tort reform,” to deny other injured victims the right to sue and collect damages from companies who caused their harm.
The Davis ad has been criticized by opponents and supporters alike for being a “negative attack ad.” We disagree. Political fact-checkers have said the ad is an accurate depiction of the facts. Nine judges said the Kirby Company acted negligently. Abbott said it did not. In fact, Abbott specifically said “… Kirby owed no duty to Ms. Read under the circumstances of this case.” The simple truth is that Kirby was aware of the risk involved in requiring dealers hired by its distributors to go door-to-door to sell its products through “in-home demonstrations.” There had been prior sexual assaults by Kirby products dealers, thus the risk of sending dealers who had not been background checked into unsuspecting customer homes was foreseeable. Kirby controlled every aspect of the “in-home demonstrations,” including the prohibition of any other method being employed to sell its products and services. At a minimum, Kirby had a duty to require its distributors to conduct background checks on their dealers before allowing them to enter private homes to sell the company’s wares.
The fact that Greg Abbot did not believe Kirby owed this duty to the sexual assault victim in this case creates both a legitimate and responsible opportunity for Sen. Davis to inform the public about the attorney’s “pro-business” stand over consumer protection, even in a case where the consumer was the victim of a violent sexual assault.