author: D. MICHAEL SWINEY, J.,

text:
    Charles W. RANDOLPH, II v. EASTMAN CHEMICAL COMPANY.
    Court of Appeals of Tennessee, Eastern Section, at Knoxville.
    Feb. 18, 2005 Session.
    May 9, 2005.
    Permission to Appeal Denied by Supreme Court Oct. 31, 2005.
    Timothy A. Housholder, Knoxville, Tennessee, for the Appellant Charles W. Randolph, II.
    Richard M. Currie, Jr., Kingsport, Tennessee, for the Appellee Eastman Chemical Company.
   OPINION

D. MICHAEL SWINEY, J.,

delivered the opinion of the court, in which

CHARLES D. SUSANO, JR., and PATRICIA J. COTTRELL, JJ., joined.

Charles W. Randolph, II, (“Plaintiff’) is an engineer employed by TesTex, Inc. (“TesTex”). Eastman Chemical Company (“Eastman” or “Defendant”) entered into a contract with TesTex for TesTex to conduct non-destructive electromagnetic testing on heat exchangers located at Eastman’s Kingsport facility. The testing was to occur during a plant shutdown which lasts for twenty days and which occurs every two years. Plaintiff was on Eastman’s premises to conduct the electromagnetic testing when he was injured while boarding an elevator. Plaintiff filed a negligence lawsuit against Eastman. Eastman asserted that it was Plaintiffs statutory employer pursuant to Tenn.Code Ann. § 50-6-1 IB and, therefore, Plaintiff was prohibited from filing a negligence claim because of the exclusive remedy rule contained in the workers’ compensation law. After a trial, the Trial Court agreed with Eastman and held that Plaintiffs negligence claim was barred. We affirm.

Background

On May 14, 2001, Plaintiff was on Eastman’s premises to begin conducting the non-destructive electromagnetic testing. Plaintiff and other TesTex employees were directed to board a particular elevator which, according to Plaintiff, had two horizontally opposed doors, “one top and one bottom, that meet in the middle.” Plaintiff claims that as he was entering the elevator, the top door on the elevator suddenly and without warning forcefully dropped down striking him on the head and knocking him to the ground. Plaintiff claims he suffered serious and permanent injuries as a result of the accident.

In May of 2002, Plaintiff filed a tort action against Eastman alleging negligence by Eastman and/or its employees. Eastman answered the complaint and denied that it or any of its employees engaged in any negligent conduct or that it otherwise had any tort liability to Plaintiff. Eastman also claimed that it was Plaintiffs “statutory employer” pursuant to TenmCode Ann. § 50-6-113 and, therefore, Plaintiff’s negligence claim was barred by the exclusive remedy rule contained in the workers’ compensation law, TenmCode Ann. § 50-6-108. In light of Eastman’s answer, Plaintiff amended his complaint to add, alternatively, that he was entitled to workers’ compensation benefits if Eastman was Plaintiff’s statutory employer.

Eastman filed a motion for summary judgment claiming the undisputed material facts demonstrated that it was Plaintiff’s statutory employer and, therefore, Plaintiffs negligence claim was barred by the exclusive remedy rule. After Plaintiff responded to Eastman’s motion, the -Trial Court denied the motion after concluding there were genuine issues of material fact.

Even though Defendant’s motion for summary judgment was denied, the issue of whether Eastman was Plaintiff’s statutory employer thus barring a negligence claim remained a critical issue which impacted the remaining course of the proceedings. For example, Plaintiff had requested a trial by jury on his tort claim, but a jury trial is not available in a workers’ compensation claim. Other practical distinctions between tort claims and workers’ compensation claims were recently discussed by our Supreme Court as follows:

[Although] workers’ compensation claims and tort claims may arise from one injury, involve the same plaintiff and proceed simultaneously, they may not be combined into one lawsuit. To do so would confuse the fault-based liability of tort with the statutorily imposed “no fault” liability of workers’ compensation. The justifications for imposing liability upon an employer are entirely separate and distinct from those supporting imposition of liability upon a third party tort-feasor. Accordingly, an employer cannot allocate fault to a third party and neither may an employee combine workers’ compensation and tort claims in one action. In these instances, fault may not be compared and apportioned between the employer and tortfeasor, and any such claims must be brought in two separate actions....

Curtis v. G.E. Capital Modular Space, 155 S.W.3d 877, 883-84 (Tenn.2005).

In an attempt to prevent potentially unnecessary litigation costs, attorney fees, etc., the parties and the Trial Court wisely agreed to conduct a mini-trial on the sole issue of whether Eastman was Plaintiffs statutory employer. After this mini-trial was completed, the Trial Court concluded Eastman was Plaintiffs statutory employer and, therefore, Plaintiffs negligence claim was barred by the exclusive remedy rule. The Trial Court then transferred Plaintiffs surviving workers’ compensation claim to its non-jury docket. Pursuant to Ténn. R. Civ. P. 54.02, the Trial Court stated that there was no just reason for delay and designated its judgment on the statutory employer issue as final.

Plaintiff appeals claiming the Trial Court erred when it concluded that Eastman was his statutory employer and, as a result of this ruling, then dismissed Plaintiffs negligence claim because it was barred by the exclusive remedy rule.

Discussion

The factual findings of the Trial Court are accorded a presumption of correctness, and we will not overturn those factual findings unless the evidence preponderates against them. See Tenn. R.App. P. 13(d); Bogan v. Bogan, 60 S.W.3d 721, 727 (Tenn.2001). Cf. Tenn. Code Ann. § 50-6-225(e)(2). With respect to legal issues, our review is conducted “under a pure de novo standard of review, according no deference to the conclusions of law made by the lower courts.” Southern Constructors, Inc. v. Loudon County Bd. Of Educ., 58 S.W.3d 706, 710 (Tenn.2001).

Most of the underlying facts in this case are undisputed or uncontested. The first of only two witnesses called at trial was Eric M. Kniedler (“Kniedler”), a chemical engineer employed by Eastman for twenty-three years. Kniedler testified that Eastman manufactures a multitude of different chemicals, plastics and fibers. Eastman has a coal gasification facility which is comprised of two departments, a gasification department and an acetic anhydride department. Kniedler is the superintendent for the acetic anhydride department and manages its day-to-day operations and the roughly 100 employees who work in that department. The gasification department makes carbon monoxide and a synthetic gas called Syngas out of the coal. Kniedler’s department then uses these two gases to make acetic anhydride and acetic acid which are used by Eastman internally to make many other products. Kniedler described the acetic anhydride and acetic acid as “feed stock for a multitude of different chemicals within our particular division and within other divisions.”

Kniedler testified that the coal gasification facility operates continuously except when it is routinely shutdown once every two years for cleaning and inspections. Capital improvements and any needed repairs also are accomplished during this shutdown. Kniedler stated that the shutdown occurs every two years and has been taking place since the facility’s inception in 1980 or 1981. A shutdown usually lasts for twenty days and, according to Knie-dler:

We call it the complex shutdown because it takes ... the whole complex down.... A lot of times the planning for the next shutdown starts immediately on completion of the shutdown that took place. We do a lot of inspections, and there’s some long-term delivery items that need to be gotten, such as if we find that a particular reactor or heat exchanger or distillation column needs some work, there’s long-term delivery for this material. So we will initiate the paperwork to get the capital project approved and start that work right away. About six months in advance [of the shutdown], we will assign an engineer and a technologist to start planning out in more detail what work needs to be done with each plant, and then close to three months prior, we start in great detail to actually plan out the shutdown down to the detail level ... and try to understand how much resources we have and then what other resources do we need to go out and get in order to handle the whole shutdown.

During a biannual shutdown, all chemicals are emptied out of the vessels to “get it ready for people to actually go inside the vessels” to conduct an inspection. The emergency shutdown system also is inspected. The plant is staffed twenty-four hours a day, seven days a week while the shutdown is taking place. Maintenance coordinators coordinate the hour-to-hour work that takes place. Supervision is handled by team managers although engineers also assist with the supervision. Eastman employees conduct much of the plant-wide maintenance and inspection work during the shutdown.

Kniedler described a heat exchanger as a vessel or cylinder that has heads on both sides and “some of them have thousands of small tubes [inside] that just run the whole length.” The heat exchangers use steam to transfer heat to a medium or river water to cool the medium. While Eastman employees conduct visual inspections of the heat exchangers to look for any obvious problems, Eastman does not have the technology to conduct non-destructive electromagnetic testing. Eastman contracted with TesTex which does have that technology and is able to test the tubes inside the heat exchangers for any indication that the heat exchangers may be “getting ready to fail.” The data collected by TesTex is used by Eastman to determine the condition of the exchangers and whether any corrective action needs to be taken. Knie-dler acknowledged that based on the results of the tests performed by TesTex during the May 2001 shutdown, Eastman did not have to make any repairs to the heat exchangers.

Kniedler explained that according to Eastman’s policies, employees of an outside contractor such as TesTex are required either to undergo detailed safety training or to be escorted at all times by one of Eastman’s employees or a trained contractor. Kniedler believed Plaintiff and the other TesTex employees did not have the required training and therefore were required to have an escort. Kniedler added that “the escort is with them at all times. So if they deem that they need to come in at night, then arrangements would be made to have an escort with them.”

In addition to TesTex there were several other contractors onsite during the shutdown. All in all, there were around eight hundred (800) particular jobs being accomplished during the shutdown at a total cost of approximately $6,500,000. Kniedler stated that the shutdown is an integral part of Eastman’s business and is needed to ensure Eastman has reliable operations and is in compliance with applicable legal safety requirements.

Kniedler acknowledged that Eastman did not decide when TesTex’s employees started working on any particular day or when they took breaks, etc. Eastman did, however, set the timetable for when the project had to be completed and expected it to be completed according to the contract. TesTex determined which of its employees would be sent to Eastman’s facility to complete the requirements of the contract. Eastman could not terminate the employment of any of the TesTex employees, but Eastman could insist that a particular TesTex employee not return to its facility. One of Eastman’s employees named Randal was a pressure vessel inspector who worked closely with TesTex. According to Kniedler, Randal would determine if the results of the electromagnetic testing were as expected or perhaps suggest that TesTex try a different technique or “do things differently.” However, Randal would not tell TesTex employees how to operate the equipment which they brought with them in order to conduct the testing.

The second witness was Plaintiff who testified that he is a nondestructive testing engineer with TesTex. Plaintiff stated that TesTex has proprietary equipment that is manufactured by TesTex and this equipment was used to test the heat exchangers at Eastman’s facility. TesTex only tested the heat exchangers. TesTex would not have been the one to have repaired or replaced the exchangers if any of them had been found to be defective.

Plaintiff testified that he arrived at Eastman’s facility on the day of the accident and initially went to a trailer to obtain a permit, presumably to show that he was authorized to be on the premises. Next, Plaintiff visually inspected the heat exchanger and then left to retrieve the equipment he needed to conduct the testing. Plaintiff was in the process of returning to where the heat exchanger was located when he and other TesTex employees were directed to use a particular elevator. The elevator opened up, two people exited the elevator, and Plaintiff started to walk onto the elevator and “the next thing I know, I was on the ground.” Plaintiff stated that to his knowledge, the escort that was accompanying him was an Eastman employee. Plaintiff added that it was his understanding that no one at Eastman had the right to control the work he was performing at Eastman’s facility.

The only proof offered at trial was Knie-dler’s and Plaintiffs testimony. Naturally, Kniedler’s testimony was much more detailed than Plaintiffs with regard to the shutdown process which occurs at Eastman every two years. To the extent both witnesses were able to give testimony about a particular factual issue, their testimony was for the most part consistent. In holding that Eastman was Plaintiffs statutory employer the Trial Court did conclude that Eastman did not have any direct control over how TesTex employees actually did their job. The Trial Court then added:

[U]nder 50-6-113 if [Plaintiff] were here today suing Eastman Chemical Company for workers’ compensation I would rule in his favor because I think it’s covered under 50-6-113. This was a regular project of Eastman Chemical Company carried out every two years, and they were the prime contractor, did much of the work themselves, but things that they did not have the expertise, they ... outsourced it to other companies, and if I find that he would be covered, then the inverse is true, he cannot sue them for [negligence] ... under the exclusive remedy statute, 50-6-108, and, therefore, [the negligence] case is dismissed.

On appeal, Plaintiff relies heavily on Murray v. Goodyear Tire & Rubber Co., 46 S.W.3d 171 (Tenn.2001). In that case the defendant, Goodyear Tire & Rubber Company (“Goodyear”), contracted with the plaintiffs employer to paint overhead air ducts. Goodyear required the plaintiffs employer to obtain liability insurance and to perform the work during “nonpro-duction” times and in accordance with Goodyear’s safety regulations. Id. at 173-74. Goodyear employees periodically supervised the painters to ensure compliance with safety regulations. Although Goodyear supplied drop-cloths and tarpaulins to cover the floor and tires, the plaintiffs employer otherwise provided all the materials and equipment needed to accomplish the painting of the duct work. The plaintiffs employer directed the painting methods and scheduled the painters’ work hours within the parameters established by Goodyear. Id. at 174. The plaintiff was severely injured when an air duct he was painting collapsed causing him to fall eighteen feet. The Plaintiff then filed a workers’ compensation lawsuit against his employer and Goodyear, claiming Goodyear was his statutory employer. The trial court concluded that the amount of control exercised by Goodyear was sufficient for Goodyear to be deemed plaintiffs statutory employer. Id. at 173.

On appeal the Supreme Court reversed the decision reached by the trial court. In so doing, the Supreme Court explained that the Tennessee Legislature extended the 'employer/employee relationship by enacting Tenn.Code Ann. § 50-6-113 which provides that a principal contractor will be liable for workers’ compensation benefits when, at the time of injury, the employee was engaged upon the subject matter of the general contract and the injury occurred in, on, or about the premises under the control or management of the principal contractor. Id. at 175. According to the Court:

The determinative question in this case, then, is whether Goodyear is a principal contractor within the meaning of section 50-6-113 and therefore liable for workers’ compensation benefits as a statutory employer.... A company or other business is considered a principal contractor if the work being performed by a subcontractor’s employees is part of the regular business of the company or is the same type of work usually performed by the company’s employees. See Barber v. Ralston Purina, 825 S.W.2d 96, 99 (Tenn.Ct.App.1991).... Undoubtedly, regular maintenance, repair, painting, and cleaning are an “ex-pectable, routine and inherent part of carrying on any enterprise,” Smith v. Lincoln Mem’l Univ., 202 Tenn. 238, 304 S.W.2d 70, 74 (1957), and the record reflects that Goodyear employees occasionally perform small maintenance tasks. However, Goodyear subcontracts out those projects that are more extensive in nature, or that require “special equipment [and] special techniques.” This project could hardly be classified as a regular part of the employer’s regular work, as the evidence presented at trial demonstrates that it could only be completed at certain times, such as when the plant was not in operation. Moreover, there is no indication that cleaning and painting overhead ducts some eighteen to twenty feet above the ground is the type of project that needs to be done on a continual basis.

Id. at 175-76.

The Goodyear Opinion went on to add that even if a company contracts out work that is not usually performed by its employees, the company still may be considered a principal contractor based on the right of control over the conduct of the work and the employees of the subcontractor. The control test is satisfied if the proof establishes the employer had a right to control, regardless of whether that right was exercised. Id. The Court concluded that the control test was not met because: (1) Goodyear did not hire the plaintiff or include him in the contract negotiations; (2) Goodyear paid the plaintiffs employer for the full contract amount and plaintiffs employer, in turn, paid the plaintiff an hourly wage; (3) Goodyear could not terminate the plaintiffs employment; and (4) Goodyear neither possessed nor exercised any control over how the plaintiff performed the work other than to ensure compliance with safety regulations applicable to everyone in the building. Id. at 176-77.

If we view Eastman’s contract with Tes-Tex in total isolation, then Plaintiffs argument that Eastman was not his statutory employer is appealing. For example, since Eastman did not possess the technology to perform the non-destructive electromagnetic testing, it certainly could be argued that such testing could never be considered work “usually” performed by Eastman employees. In other words, Eastman employees cannot be considered to usually perform work they in fact have never done. Goodyear would be more factually on point if Eastman had simply decided that it was a good idea to conduct nondestructive electromagnetic testing on the heat exchangers and entered into a contract with TesTex to perform the testing at a time when Eastman was not in the throes of one of its shutdowns. Of course, that is not what happened.

However, if we do not view Eastman’s contract with TesTex in isolation but instead look at the entire picture, then Plaintiffs argument loses much of its appeal. What we have is a large company which manufactures chemicals, plastics and fibers. Due to the nature of what is being manufactured along with how it is being manufactured, every two years the entire complex is shutdown and must be cleaned, inspected, repaired and/or updated. This comprehensive shutdown lasts around the clock for twenty days and when it is finally completed, the planning for the next shutdown begins. During the shutdown the plant is staffed twenty-four hours a day and Eastman employees conduct as much of the repair, inspection and maintenance work as possible and, if necessary, outside contractors are brought in to accomplish the remainder of the work. The shutdown is planned by engineers, technologists, etc., all the way down to the “detail level” with roughly eight hundred different jobs being mapped out at a total cost of $6,500,000. Unlike the painting of the duct work in Goodyear, the evidence in the present case demonstrates that the work performed during a shutdown must be done on a continual basis, i.e., every two years, in order for the plant to operate properly, effectively, and in compliance with applicable safety regulations. When no shutdown is in effect, the next shutdown is being planned. This means that either a shutdown or the planning for a shutdown is ongoing by Eastman most all of the time.

The facts in the present ease are more similar to those addressed by the United States District Court for the Eastern District of Tennessee in Lambert v. Tennessee Valley Authority, No. 1:01-CV-330, 2002 WL 32059747, 2002 U.S. Dist. LEXIS 26340 (E.D.Tenn. Sept.17, 2002). In Lambert, the plaintiff was injured while working on an ice-blowing auger machine at TVA’s Sequoyah nuclear power plant. The plaintiff brought a negligence claim against TVA and the primary issue was whether that claim was barred by the exclusive remedy rule in the workers’ compensation law. The district court concluded the plaintiffs negligence claim was barred and granted TVA’s motion for summary judgment. In so doing the district court noted that TVA’s electric power operations continuously involved maintenance and modification of its nuclear power plants. While TVA employees accomplished a “significant amount” of this work, TVA also entered into contracts with other companies to perform “much” of the work. Lambert, 2002 WL 32059747, at *2, 2002 U.S. Dist. LEXIS 26340, at *4. The Lambert Court observed that the Se-quoyah nuclear power plant had two nuclear power units with each unit having an ice condenser system containing roughly two million pounds of ice. TVA’s maintenance procedures required that each ice condenser be inspected, serviced, and replenished with ice every eighteen months. The entire maintenance process for each condenser typically lasted “twenty days with two twelve-hour shifts of approximately forty workers for each shift.” Id., 2002 WL 32059747, at ⅝2, 2002 U.S. Dist. LEXIS 26340, at *5. The plaintiff worked for Stone & Webster Construction Company (“S & W”) which had a long term contract with TVA to provide maintenance services at TVA’s nuclear power plants. The district court ultimately concluded that TVA was a statutory employer pursuant to TenmCode Ann. § 50-6-113 in that TVA was acting as its own principal contractor at the Sequoyah nuclear power plant. In reaching this conclusion, the district court made several factual observations which are analogous to the facts in the present case. Specifically, the district court stated:

[Tjhis Court finds that the maintenance service performed on the ice condensers at Sequoyah by S & W was part of the regular business of TVA and was the same type of work (maintenance service) usually performed by TVA’s employees. As part of its operation of nuclear power plants, TVA routinely and continuously engages in modification and maintenance services on its facilities. Regular maintenance and repair work are an inherent part of carrying on the enterprise of operating nuclear power plants. Although TVA may not have had its own direct employees performing a substantial part of the actual manual labor on the ice condenser and remove the thick ice from the auger ..., this fact is not dispositive of the outcome here. The totality of the circumstances establishes that TVA was the principal contractor on its own premises at Sequoyah.
TVA may be a principal contractor in the regular business of performing a particular task (maintenance service on ice condenser at Sequoyah) without necessarily having TVA employees do the manual labor. Brown, 844 S.W.2d at 138. TVA is engaged in a business — the operation of nuclear power plants— which by its size and nature requires TVA to have an extensive ongoing program of constant construction, modification, replacement, and maintenance service. Prior to 1991, TVA carried out its maintenance duties through its own employees. After 1991, TVA turned to outside companies such as S & W for assistance in performing the maintenance service work that forms a part of TVA’s regular business activity in operating the nuclear power plants. TVA’s employees have continued to work on maintenance activities after 1991, and the TVA — S & W contract authorizes TVA to use and rely on its own employees to perform work duties within the scope of the contract. Therefore, TVA is the principal contractor at Sequoyah. Id.

Lambert, 2002 WL 32059747, at *4-5, 2002 U.S. Dist. LEXIS 26340, at *11-13.

Although the decision in Lambert is not binding on this Court, we agree with the reasoning of the Court in that case and reach a similar conclusion here. Without question, the events which take place during the shutdown are of vital importance to Eastman and are undertaken to ensure that the plant is running properly and efficiently during the remaining 102 weeks out of every two year period. In addition, the shutdown is needed to make sure the plant is running safely and in accordance with safety regulations. Either a shutdown or the planning of the next shutdown is continual at Eastman. It necessarily follows that the work activities taking place during the shutdown are part of Eastman’s regular business because they are what Eastman does on a regular basis as a necessary part of its ongoing business operation and, without them, there likely would be no business.

The shutdown should be viewed as one large project which has been carefully choreographed over the preceding two years so that roughly eight hundred particular jobs can be completed in just twenty days. Eastman is undoubtedly the principal contractor on this project and much of the repairing, cleaning, inspecting, testing, , supervising, upgrading, etc., is accomplished by Eastman employees. The evidence presented to the Trial Court shows that the work performed during the shutdown is an integral part of Eastman’s regular business. The evidence does not preponderate against the Trial Court’s findings, and we conclude that the testing and/or inspecting accomplished by TesTex was part of the regular business of Eastman and the same type of work (i.e., testing, inspecting, etc.) performed by Eastman employees. This result is not changed simply because Eastman did not have the technology to perform non-destructive electromagnetic testing and was required to contract with another company in order to accomplish this one of over eight hundred particular jobs being completed during the twenty day shutdown.

In summary, we conclude that Tes-Tex was performing work which was part of the regular business of Eastman and which was typically performed by Eastman’s employees. Accordingly, the Trial Court correctly determined that Eastman was a principal contractor for purposes of Tenn.Code Ann. § 50-6-113 and is Plaintiffs statutory employer. It necessarily follows that the exclusive remedy rule contained in Tenn.Code Ann. § 50-6-108 bars Plaintiffs negligence claim. In light of this holding, the issue of whether Eastman was a principal contractor because it had the right to control the conduct of Tes-Tex’s work and its employees is pretermit-ted.

Conclusion

The Judgment of the Trial Court is affirmed, and this cause is remanded to the Trial Court for further proceedings as necessary consistent with this Opinion and for collection of the costs below. Costs on appeal are assessed against the Appellant Charles W. Randolph, II, and his surety.

      . Plaintiff also sued the manufacturer of the elevator but that claim was dismissed with the entry of an agreed order granting the manufacturer’s motion for summary judgment. The dismissal of that claim is not at issue on appeal.

      . In relevant part, the exclusive remedy rule codified at Tenn.Code Ann. § 50-6-108 provides: "The rights and remedies herein granted to an employee subject to the Workers’ Compensation Law on account of personal injury or death by accident, including a minor whether lawfully or unlawfully employed, shall exclude all other rights and remedies of such employee, such employee’s personal representative, dependents or next of kin, at common law or otherwise, on account of such injury or death.”

      . As relevant, Tenn. R. Civ. P. 54.02 provides: “When more than one claim for relief is present in an action, whether as a claim, counterclaim, cross-claim, or third party claim, or when multiple parties are involved, the court, whether at law or in equity, may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.”

      . We note that Goodyear only requires Eastman to establish either that "the work being performed by a subcontractor’s employees is part of the regular business of the company or is the same type of work usually performed by the company's employees.” Goodyear, 46 S.W.3d at 176 (emphasis added).


source: Caselaw Access Project

author: SHARON G. LEE, J„

license: Public Domain

text:
    MONEY & TAX HELP, INC. v. Tom MOODY, et al.
    Court of Appeals of Tennessee, Eastern Section, at Knoxville.
    Dec. 7, 2004 Session.
    Feb. 3, 2005.
    Permission to Appeal Denied by Supreme Court Aug. 29, 2005.

      Robert R. Davies, Knoxville, Tennessee for Appellants Tom Moody and SACCA Corporation.
    John 0. Threadgill, Knoxville, Tennessee for Appellee Money & Tax Help, Inc.
   OPINION

SHARON G. LEE, J„

delivered the opinion of the court, in which

HERSCHEL P. FRANKS, P.J., and WILLIAM H. INMAN, Sr.J., joined.

This case involves the enforcement of a non-compete agreement. The issues presented are: (1) whether the court erred in enforcing the agreement against Tom Moody, a former employee of the Plaintiff, Money & Tax Help, Inc., and against Mr. Moody’s wholly-owned corporation, SAC-CA Corporation; (2) whether the trial court erred in holding Mr. Moody personally liable for breach of an agreement signed by him on behalf of SACCA Corporation; (3) whether the damages claimed by Money & Tax Help, Inc. were too speculative; (4) whether the trial court erred in finding Mr. Moody and SACCA Corporation not liable for procurement of breach of contract under TenmCode Ann. § 47-50-109; and (5) whether the trial court erred in failing to offset Mr. Moody’s counterclaim. We hold that the trial court erred by holding Mr. Moody personally liable for breach of the agreement and affirm the trial court’s judgment in all other respects.

I. Factual Background

In 1994, Mr. Moody was employed as an accountant by Comprehensive Business Services, Inc., predecessor of Plaintiff Money & Tax Help, Inc. That same year the assets of Comprehensive Business Services, Inc. were sold to John R. Brown. On December 19,1994, Mr. Moody entered into an agreement with Mr. Brown which provided in relevant part as follows:

NON-COMPETE AGREEMENT
(Tom Moody — Employee)
In consideration of the consummation of a certain Asset Purchase Agreement wherein many of the assets of Comprehensive Business Services, Inc. were sold to John R. Brown hereinafter referred to as “Buyer.” Tom Moody does [sic] hereinafter referred to as “Employee” hereby covenants and agrees as follows:
A. Without Buyer’s prior written consent, for a period commencing upon the termination of his employment by Buyer, and extending three years, Tom Moody will not, within the city limits of Knoxville, Tennessee, or within an area extending 50 miles in all directions from such city limits:
B. directly or indirectly (whether as owner, director, stockholder, employee, officer, agent, broker, dealer, lessee, representative or in any other capacity) engage in the performance of any services or similar services as conducted in the operations of Seller’s business which is being sold to Buyer as referenced in the Recitals, or the performance of related services such as are performed by Buyer or its subsidiaries, affiliates or franchisees, including filing tax returns and all business accounting;
C. assist or have an interest (financial or otherwise, whether as partner, stockholder, or any type of principal or investor whatever) in a tax return preparation business and business accounting practice, provided, that ownership of note more than 1% of the outstanding stock in a corporation traded on a national securities exchange shall not of itself be viewed as assisting or having an active interest in a tax return preparation business and business accounting practice.
D.act as an agent for or advisor or consultant to any person, firm, partnership, association, corporation or business organization, entity or enterprise (other than Buyer) that is about to become directly or indirectly engaged in a tax return preparation business and business accounting practice.

After Mr. Brown bought Comprehensive Business Services, Inc., he changed its name to Tax Help, Inc.

In August of 1997, Mr. Moody incorporated a business known as SACCA Corporation (hereinafter “SACCA”). Mr. Moody testified in his affidavit that as of September 1, 1997, “I ceased being an employee of Tax Help, Inc. and was working as an independent contractor^]” On September 1, 1997, SACCA and Tax Help, Inc. entered into a contract styled “agreement for technical services” which provided that SACCA would provide, as independent contractor, certain accounting and tax consultation services to Tax Help, Inc. for a specified hourly fee. The agreement further provided in relevant part:

SACCA Corporation’s technical services and all terms of this agreement shall be available to Tax Help, Inc., its affiliates and/or assigns, from September 1, 1998 to and including August 31,1999.
SACCA Corporation will treat as proprietary any information belonging to Tax Help, Inc., affiliated companies, and/or third parties, disclosed to SAC-CA Corporation in the course of provided services.... SACCA, its owners, officers and/or employees agree to be bound by and included in that certain Non-Compete Agreement dated December 19, 1994 by Tom Moody ... SACCA, its owners, officers, and/or employees agree to the term [sic] and conditions of said Non-Compete Agreement and that said terms and conditions are transferable, and thereby incorporated into this agreement herein. SACCA, its owners, officers, and/or employees agree that the execution and/or termination, for any reason, of this Agreement for Technical Services shall in no manner constitute ‘termination’ as outlined in Article A of said Non-Compete Agreement. SACCA, its owners, officers, and/or employees agree that said Non-Compete shall survive and extend beyond the term of this Agreement for Technical Services. SACCA, its owners, officers, and/or employees agree that if there is a conflict between the interpretation of said Non-compete Agreement and this Agreement for Technical Services, that the terms and conditions of the Non-Compete Agreement shall prevail.

(Numbering in original omitted).

Mr. Moody, on behalf of SACCA, and Mr. Brown, on behalf of Tax Help, Inc. signed a nearly identical agreement on September 1,1998.

On June 16, 1999, Mr. Brown sold the assets of Tax Help, Inc. to Henry J. Davis, who then renamed the corporation “Money & Tax Help, Inc.” SACCA, through Mr. Moody, continued to provide the same tax and accounting services to Money & Tax Help, Inc. In August of 1999, Mr. Moody presented another agreement for technical services to Mr. Davis. This agreement was very similar to the earlier ones, and it contained a paragraph with identical language regarding the incorporation of the non-compete agreement as quoted above. The parties signed the agreement, which was dated September 1,1999.

After the sale of the business to Mr. Davis, Mr. Moody began making plans to leave Money & Tax Help, Inc. Although Mr. Moody had incorporated his business and was doing work for SACCA as an independent contractor, it appears Mr. Moody still had his office at one of Money & Tax Help, Inc.’s locations, as before the incorporation. The record suggests that Money & Tax Help, Inc. was clearly SAC-CA’s primary, if not its only, source of contract work.

In July of 2000, Mr. Moody sent solicitation letters to those clients of Money & Tax Help, Inc. for whom he had done work. The letter advised that “effective September 1, 2000, I [Mr. Moody] will no longer be working with Money & Tax Help, Inc., but will be opening my own accounting practice. I want to assure you that I very much desire to continue handling your accounting matters.”

On August 30, 2000, Money & Tax Help, Inc. filed this lawsuit, alleging that Mr. Moody and SACCA breached the non-compete agreement by taking a substantial number of clients when they left Money & Tax Help, Inc. Mr. Moody counterclaimed for $1,056.00, the amount of charges for services provided to Money & Tax Help, Inc. before he left, but allegedly for which he was not paid. After hearing the case on June 25, 2003, the trial court ruled that Mr. Moody and SACCA had breached the agreement and were liable for damages. The trial court offset the $77,796.00 award to Money & Tax Help by $1,056.00, which it found to be duly owing to Mr. Moody and SACCA.

II. Issues Presented

Mr. Moody and SACCA appeal, raising the following issues:

1. Whether the trial court erred in enforcing the non-compete agreement against Mr. Moody and SACCA.

2. Whether the trial court erred in holding Mr. Moody personally hable for breach of the agreement he signed in his corporate capacity as president of SACCA.

3. Whether the trial court erred by not finding the evidence of damages presented by Money & Tax Help, Inc. was too speculative to allow recovery.

Additionally, Money & Tax Help, Inc. raises the following issues:

4. Whether the trial court erred by failing to award treble damages for inducement of breach of contract, pursuant to Tenn.Code Ann. § 47-50-109.

5. Whether the trial court erred in failing to offset the award on the counterclaim by the time for which Mr. Moody was paid but allegedly did not work for Money & Tax Help, Inc.

III. Standard of Review

In this non-jury case, our review is de novo upon the record of the proceedings below; but the record comes to us with a presumption of correctness as to the trial court’s factual determinations which we must honor unless the evidence preponderates against those findings. Tenn. R.App. P. 13(d); Wright v. City of Knoxville, 898 S.W.2d 177, 181 (Tenn.1995); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn.1993). The trial court’s conclusions of law, however, are accorded no such presumption. Campbell v. Florida Steel Corp., 919 S.W.2d 26, 35 (Tenn.1996); Presley v. Bennett, 860 S.W.2d 857, 859 (Tenn.1993).

IV. The Non-Compete Agreement

In Tennessee, agreements in restraint of trade, such as covenants not to compete, although disfavored by law, “are valid and will be enforced, provided they are deemed reasonable under the particular circumstances.” Allright Auto Parks, Inc. v. Berry, 219 Tenn. 280, 409 S.W.2d 361, 363 (1966). The inquiry as to reasonableness under the circumstances is a fact-specific one, and there is no inflexible formula for determining reasonableness; “each case must stand or fall on its own facts.” Id. The Supreme Court noted in Allright Auto Parks, Inc. that

[i]t is generally agreed that, before a noncompetitive covenant will be upheld as reasonable and therefore enforceable, the time and territorial limits involved must be no greater than is necessary to protect the business interests of the employer.

Id. at 363.

Mr. Moody argues that the trial court erred in holding that Money & Tax Help, Inc. had a properly protectable business interest in its list of accounting clients. See Vantage Technology, LLC v. Cross, 17 S.W.3d 637, 644 (Tenn.App.1999). But “it has long been settled that present customers are a protectable interest of an employer.” Thompson, Breeding, Dunn, Creswell & Sparks v. Bowlin, 765 S.W.2d 743, 745 (Tenn.App.1987)(emphasis in original). The Bowlin case involved the specific context of an accounting firm. We hold the trial court did not err in its holding that Money & Tax Help, Inc. had a properly protectable business interest in this case.

A careful reading of the contractual language at issue here yields the conclusion that, as written, the agreement is too broad to be construed as reasonable. The non-compete agreement, quoted at length in Section I above, if enforced as written, would essentially preclude Mr. Moody (who holds a bachelor’s degree in accounting but is not a CPA) from practicing his profession at all for three years within 50 miles of Knoxville.

In the case of Central Adjustment Bureau, Inc. v. Ingram, the Supreme Court specifically addressed the question of whether a trial court has the authority to modify a covenant not to compete which is otherwise unreasonably broad. Ingram, 678 S.W.2d 28, 36 (Tenn.1984). The Court answered in the affirmative and adopted a “rule of reasonableness” stated as follows:

This rule provides that unless the circumstances indicate bad faith on the part of the employer, a court will enforce covenants not to compete to the extent that they are reasonably necessary to protect the employer’s interest without imposing undue hardship on the employee when the public interest is not adversely affected.

Id. at 37 (internal quotations omitted).

Applying the rule of reasonableness adopted in Ingram, we hold that the non-compete agreement between the parties should be construed as prohibiting Mr. Moody and SACCA from performing, for three years, the financial and accounting services described in the contract for those clients who were presently on Money & Tax Help, Inc.’s clientele list as of the time Mr. Moody left Money & Tax Help, Inc. At trial, all of the evidence pertaining to damages presented by Money & Tax Help, Inc. involved individuals or entities, who were then present clients of Money & Tax Help, Inc., which apparently responded to Mr. Moody’s solicitation and transferred their business from Money & Tax Help, Inc. to SACCA. The damages awarded by the trial court were thus not overbroad, and were in keeping with our interpretation of the agreement under the reasonableness rule.

Regarding the time limitation of three years, this court has on several occasions found such a limitation reasonable. See Vantage Technology, LLC v. Cross, 17 S.W.3d 637, 644 (Tenn.App.1999) and the cases cited therein; Thompson, Breeding, Dunn, Creswell & Sparks v. Bowlin, 765 S.W.2d 743, 745 (Tenn.App.1987); Harvey v. Appalachian Claims Service, Inc., C/A No. 03A01-9410-CH-00374, 1995 WL 140746, 1995 Tenn.App. LEXIS 206, (Tenn.App. E.S. filed Mar. 31, 1995). Under the specific circumstances of the present case, we hold that the three-year restriction is reasonable.

V. Piercing of the Corporate Veil

The trial court held Mr. Moody and SACCA jointly and severally liable, in effect “piercing the corporate veil” of SAC-CA to find Mr. Moody personally liable. Mr. Moody argues that this was error. We agree that Money & Tax Help, Inc. did not meet its burden of proving that the corporate form should have been disregarded in this case.

This court has recently restated the legal principles guiding a determination of whether a corporation’s veil should be pierced as follows:

Under Tennessee law, there is a strong presumption that a corporation is a distinct legal entity, independent from its directors, officers, and shareholders, and the party seeking to impose personal liability on the directors, officers, and shareholders bears the burden of demonstrating facts sufficient to warrant piercing the corporate veil. Schlater v. Haynie, 833 S.W.2d 919, 925 (Tenn.Ct.App.1991); Emergicare Consultants, Inc. v. Woolbright, No. W1998-00659-COA-R3-CV, 2000 WL 1897350, at *2 (Tenn.Ct.App. Dec.29, 2000) perm. app. denied (Tenn.2001). The courts of this state consider several factors when determining whether to pierce the corporate veil, including: (1) whether there was a failure to collect paid in capital; (2) whether the corporation was grossly undercapitalized; (3) the nonissuance of stock certificates; (4) the sole ownership of stock by one individual; (5) the use of the same office or business location; (6) the employment of the same employees or attorneys; (7) the use of the corporation as an instrumentality or business conduit for an individual or another corporation; (8) the diversion of corporate assets by or to a stockholder or other entity to the detriment of creditors, or the manipulation of assets and liabilities in another; (9) the use of the corporation as a subterfuge in illegal transactions; (10) the formation and use of the corporation to transfer to it the existing liability of another person or entity; and (11) the failure to maintain arms length relationships among related entities.

Amanda Const., Inc. v. White, C/A No. W2004-00521-COA-R3-CV, 2004 WL 2752805 at *2; 2004 Tenn.App. LEXIS 818,(Tenn. App. W.S. filed Dec.l, 2004)(emphasis added). We have noted that “the principle of piercing the fiction of the corporate veil is to be applied with great caution and not precipitately[.]” Schlater v. Haynie, 833 S.W.2d 919, 925 (Tenn.App.1991). Further, “[a] corporation and its stockholders are distinct legal entities even if all the stock in the corporation is owned by one stockholder.” Hadden v. City of Gatlinburg, 746 S.W.2d 687, 689 (Tenn.1988).

In the present case, there was very little evidence presented to the trial court regarding SACCA or the way Mr. Moody operated it. The only information in this regard contained in the record is Mr. Moody’s testimony that he was the sole owner and officer of SACCA, and that he incorporated his business to take advantage of tax benefits. There is no allegation of fraud or misuse of the corporate form, nor is there any evidence regarding the record keeping practices of SACCA.

Mr. Moody signed the agreement for technical services with Money & Tax Help, Inc. in his corporate capacity, as “President, SACCA Corporation.” In addition, the contract specifically recites that it is between SACCA Corporation and Money & Tax Help, Inc., Inc. Keeping in mind the above-cited legal principles and guidelines, we find that Money & Tax Help, Inc. did not meet its burden in proving that the corporate fiction should be disregarded in this case, and that it was error for the trial court to do so.

It is clear from the record that Mr. Moody ceased working as an employee for Money & Tax Help, Inc. (then Tax Help, Inc.) on September 1,1997, when he incorporated SACCA and became an independent contractor. As regards Mr. Moody personally, the three-year contractual term not to compete began on that date. Mr. Moody admits in his affidavit that “during the time period September 1, 1999, through August 31, 2000, neither I, individually, nor SACCA Corporation entered into any activity or business arrangement which conflicted in any manner with Money & Tax Help, Inc.’s interest or ... business except for approximately four (4) to five (5) clients in August, 2000.” Under his contractual agreement, Mr. Moody is personally hable for any business he performed for Money & Tax Help, Inc.’s clients prior to August 31, 2000.

By signing the agreement for technical services, which Mr. Moody himself presented to Mr. Davis, he bound SACCA and its employees, including himself, from providing accounting services to Money & Tax Help, Inc.’s existing clientele for three years. Mr. Moody then proceeded to do precisely that which he agreed not to do. SACCA is therefore liable for the breach of its agreement not to compete.

Mr. Moody argues that he was not aware of the fact that Tax Help, Inc. had been sold to Mr. Davis when he signed the September 1, 1999 agreement. His affidavit states “I never intended to enter into any Agreement for technical services with a corporation not owned by John R. Brown.” Even without considering the fact that the record fully supports the conclusion that Mr. Moody knew, or should have known, that Mr. Davis was the new president and owner of Money & Tax Help, Inc., this argument is not relevant to the question of whether SACCA is bound by the agreement. The agreement is between the two corporations and, as the trial court found, “there is nothing in the case that indicates that Mr. Moody’s obligations of SACCA Corporation were at any time to be tied to Mr. Brown’s ownership.”

Mr. Moody argues that the damages were too speculative to have properly been awarded. Money and Tax Help, Inc. filed an exhibit listing the name of each client lost to Mr. Moody and SACCA and the fees lost from each account. It included an estimate of one hundred individual tax returns in addition to the business clients. Money & Tax Help, Inc.’s exhibit also lists “estimated variable costs,” which Mr. Moody argues should have been found by the trial court to be higher, thus reducing Money & Tax Help, Inc.’s lost profits. On the other side, Money & Tax Help, Inc. argues, as quoted from its brief, that “the court erred in failing to offset Moody’s counterclaim for the time which Moody was paid but did not work.” Both of these issues are factually driven, and because there was conflicting evidence presented upon each of them, they are dependent in large extent on the demeanor and credibility of the witnesses. We find the evidence does not preponderate against the trial court’s conclusion that the damages were not too speculative, and that Money & Tax Help, Inc. was not entitled to an offset.

VI. Procurement of Breach of Contract

The final issue is whether the trial court erred in failing to award damages for procurement of breach of contract under Tenn.Code Ann. § 47-50-109, which provides as follows:

It is unlawful for any person, by inducement, persuasion, misrepresentation, or other means, to induce or procure the breach or violation, refusal or failure to perform any lawful contract by any party thereto; and, in every case where a breach or violation of such contract is so procured, the person so procuring or inducing the same shall be liable in treble the amount of damages resulting from or incident to the breach of the contract. The party injured by such breach may bring suit for the breach and for such damages.

The trial court correctly held that there were no existent contracts of which Mr. Moody could have induced or procured a breach:

The plaintiff also asserts that the defendants are liable to the plaintiff for treble damages by reason of having induced the plaintiffs clients to breach their contracts with the plaintiff. However, there was no evidence of any breach by anyone. None of the plaintiffs clients were under contract with the plaintiff whereby they were required to use the plaintiff exclusively for any set term. The plaintiffs agreements with its clients or customers were simply rate agreements for indefinite terms.

The evidence preponderates in favor of the court’s judgment that Tenn.Code Ann. § 47-50-109 is inapplicable to the present case. This issue is without merit.

VII. Conclusion

For the aforementioned reasons, the judgment of the trial court holding Mr. Moody personally liable for breach of the agreement signed in his corporate capacity is reversed. The remainder of the trial court’s judgment is affirmed, and the case is remanded for a determination of the amount of damages for which Mr. Moody is personally liable under his individual employee agreement, consistent with this opinion. Costs on appeal are assessed to the Appellants, Tom Moody and SACCA Corporation.


author: PER CURIAM.

text:
    In the Interest of J.P.B., a child.
    No. 05-0241.
    Supreme Court of Texas.
    Dec. 9, 2005.

      Bruce Isaacks, Criminal District Atty., Sherry Shipman, Asst. District Atty., Catherine Luft, Asst. District Atty., Vicki L Foster, Asst. District Atty., Kathleen A. Walsh, Denton County District Atty., Den-ton, for Petitioner.
    Tiffany L. Haertling, Holmes, Woods, Diggs & Eames, Robert N. Eames, Philips Hopkins Eames & Cobb, Denton, Charles E. Beachley III, Durand & Associates, Lewisville, Robert H. Wiley, Denton, for Respondent.
    Lanham Odom, Denton, for Intervenor.
    L. James Ashmore, Lawisville, for Other.
   PER CURIAM.

Lonnie B. and Esmeralda B. are the natural parents of J.P.B., the couple’s first and only child. In this parental termination case, we decide four issues: (1) whether there was legally sufficient evidence to support the jury’s finding that Lonnie’s parental rights should be terminated; (2) whether there was legally sufficient evidence to support the jury’s finding that Esmeralda’s parental rights should be terminated; (3) whether Esmeralda was denied effective assistance of counsel; and (4) whether the trial court improperly admitted x-ray evidence. We conclude that there is legally sufficient evidence to support terminating Lonnie’s parental rights. We also conclude that Esmeralda failed to preserve her legal sufficiency complaint, Esmeralda was not denied effective assistance of counsel, and the trial court did not abuse its discretion in admitting the x-ray evidence. Accordingly, we reverse the court of appeals’ judgment as to Lonnie and remand the case to that court for a factual sufficiency review. We affirm the court of appeals’ judgment as to Esmeralda.

J.P.B. was born seven weeks premature on April 25, 2002. After the child was released from the hospital on May 21, 2002, Esmeralda cared for him at home while Lonnie worked at an airplane parts manufacturer. In early July 2002, Lonnie and Esmeralda took J.P.B. to the emergency room on two occasions due to concerns about his constant crying and swollen leg. J.P.B. was admitted to the hospital on July 7, 2002 and released eight days later with a diagnosis of muscle inflammation. At a July 19, 2002 follow-up appointment, J.P.B.’s skeletal x-ray revealed twenty-one fractures — ranging from one to four weeks in age — in his ribs, arms, and legs. The Texas Department of Protective and Regulatory Services (TDPRS) removed J.P.B. from Lonnie and Esmeralda’s home the following day.

TDPRS filed suit to terminate the couple’s parental rights. The jury found by clear and convincing evidence that (1) Lonnie knowingly placed or knowingly allowed J.P.B. to remain in conditions or surroundings that endangered his physical or emotional well-being; (2) termination of Lonnie’s parental rights was in J.P.B.’s best interest; (3) Esmeralda knowingly placed or knowingly allowed J.P.B. to remain in conditions or surroundings that endangered his physical or emotional well-being and engaged in conduct or knowingly placed the child with persons who engaged in conduct which endangered the physical or emotional well-being of the child; and (4) termination of Esmeralda’s parental rights was in J.P.B.’s best interest. In conformity with the jury’s verdict, the trial court terminated Lonnie’s and Esmeralda’s parental rights.

The court of appeals concluded that no evidence supported the judgment against Lonnie, reversed the judgment, and rendered judgment restoring Lonnie’s parental rights. 2005 WL 327168. With regard to Esmeralda, the court of appeals concluded that sufficient evidence supported the judgment terminating her parental rights, she was not denied effective assistance of counsel, and the x-ray evidence was not improperly admitted. Id. 2005 WL 327168, at *8. Accordingly, the court of appeals affirmed the trial court’s judgment as to Esmeralda. Id. 2005 WL 327168, at *8.

We first consider whether there was legally sufficient evidence to support the judgment terminating Lonnie’s parental rights. To terminate parental rights, the fact-finder must find by clear and convincing evidence that the parent has committed an act prohibited by section 161.001(1) of the Texas Family Code and that termination is in the best interest of the child. TEX. FAM. CODE § 161.001(l)-(2). The jury in this case found by clear and convincing evidence that Lonnie “knowingly placed or knowingly allowed [J.P.B.] to remain in conditions or surroundings which endangered his physical or emotional well-being.” Id. § 161.001(l)(d).

In conducting a legal sufficiency review in a parental termination case:

[A] court should look at all the evidence in the light most favorable to the finding to determine whether a reasonable trier of fact could have formed a firm belief or conviction that its finding was true. To give appropriate deference to the factfinder’s conclusions and the role of a court conducting a legal sufficiency review, looking at the evidence in the light most favorable to the judgment means that a reviewing court must assume that the factfinder resolved disputed facts in favor of its finding if a reasonable factfinder could do so. A corollary to this requirement is that a court should disregard all evidence that a reasonable factfinder could have disbelieved or found to have been incredible. This does not mean that a court must disregard all evidence that does not support the finding. Disregarding undisputed facts that do not support the finding could skew the analysis of whether there is clear and convincing evidence.

In re J.F.C., 96 S.W.3d 256, 266 (Tex.2002). Therefore, in conducting a legal sufficiency review in a parental termination case, we must consider all of the evidence, not just that which favors the verdict. See City of Keller v. Wilson, 168 S.W.3d 802, 817 (Tex.2005). However, as we have noted previously, witness credibility issues “that depend on appearance and demeanor cannot be weighed by the appellate court; the witnesses are not present. And even when credibility issues are reflected in the written transcript, the appellate court must defer to the jury’s determinations, at least so long as those determinations are not themselves unreasonable.” Southwestern Bell Tel. Co. v. Garza, 164 S.W.3d 607, 625 (Tex.2004).

The following evidence supports the jury’s finding that Lonnie knowingly placed or knowingly allowed J.P.B. to remain in conditions or surroundings that endangered his physical or emotional well-being:

• Lonnie testified that he and Esmeralda shared in J.P.B.’s care, and no other person served as J.P.B.’s primary caregiver.
• A July 7, 2002 x-ray revealed that J.P.B. had rib fractures that likely occurred between July 5, 2002 and July 7, 2002. Lonnie testified that he and Esmeralda were home alone with J.P.B. on those dates.
• TDPRS’s radiology expert testified that twenty-one fractures were detected in J.P.B.’s July 19, 2002 skeletal survey and that the fractures were approximately one to four weeks old.
• TDPRS presented expert testimony that: (1) J.P.B.’s injuries were likely caused by excessive force such as abrupt yanking, pulling, or punching, and were probably not the result of J.P.B.’s medical care; (2) a parent should have known that something was wrong with a child with such injuries; and (3) the parents should have noticed high-pitched screams from J.P.B. due to the fractures.

We must also consider undisputed evidence that does not support the jury finding. See In re J.F.C., 96 S.W.3d at 266. Lonnie contends that the undisputed evidence showed that he took J.P.B. to either a doctor’s office or hospital eight times between May 23, 2002 and July 19, 2002, yet J.P.B.’s fractures were not diagnosed until the eighth visit. Although J.P.B. was x-rayed on July 7, 2002, no fractures were diagnosed at that time. In addition, while J.P.B. was hospitalized from July 7 to July 15, 2002, his fractures were not diagnosed until a July 19, 2002 follow-up appointment. The court of appeals cited to these facts in holding that there was no evidence to support the termination of Lonnie’s parental rights. 2005 WL 327168, at *11 .

While it is true that Lonnie sought medical care for J.P.B. multiple times and that J.P.B.’s doctors initially failed to diagnose the fractures, that evidence does not negate the jury’s finding that Lonnie knowingly permitted J.P.B. to remain in a setting that was dangerous to his physical well-being. Lonnie was with J.P.B. and Esmeralda every day of the four-week period during which the fractures likely occurred; J.P.B.’s doctors were not. There was evidence that J.P.B. sustained twenty-one fractures during a time when he was under Lonnie’s care, and those fractures were likely caused by such abusive treatment as yanking, pulling, or punching. The evidence also indicated that the fractures did not occur all at once and were the result of ongoing mistreatment. In light of this evidence, a reasonable jury could infer that, even though Lonnie sought medical treatment for J.P.B., he nevertheless allowed the child to remain in surroundings that endangered his physical well-being. While Lonnie may have reacted appropriately to symptoms of abuse, the evidence supports a finding that he knowingly failed to ameliorate the underlying cause. It was within the jury’s province to judge Lonnie’s demeanor and to disbelieve his testimony that he did not know how J.P.B. was injured. See Southwestern Bell Tel. Co., 164 S.W.3d at 625. Therefore, we conclude that there was legally sufficient evidence for a reasonable factfinder to form a “firm belief or conviction” that Lonnie knowingly placed or knowingly allowed J.P.B. to remain in conditions or surroundings that endangered his well-being.

We next consider Esmeralda’s claims. First, she argues that there is no evidence to support the termination of her parental rights. The court of appeals correctly held that Esmeralda failed to preserve this “no evidence” point. 2005 WL 327168, at *9.. We have held previously, however, that the court of appeals may review the factual sufficiency of the evidence in a parental termination case— even if a party failed to preserve error in the trial court — if the parent’s counsel unjustifiably failed to preserve error. In re M.S., 115 S.W.3d 534, 548 (Tex.2003). We have not extended this rule to the preservation of “no evidence” points, and it is not necessary to do so here. Esmeralda never alleged in either the court of appeals or in this Court that her counsel unjustifiably failed to preserve error; rather, she asserted the “no evidence” point without addressing the preservation issue. It is reasonable to presume that her counsel’s decision not to raise a “no evidence” point was based either on litigation strategy or on her counsel’s belief that, in his professional opinion, the evidence was legally sufficient and preservation of error was not warranted. See id. at 549. Accordingly, we hold that Esmeralda did not demonstrate that her counsel unjustifiably failed to preserve a “no evidence” issue.

Esmeralda also argues that she was denied her right to effective assistance of counsel because her trial attorney was appointed less than thirty days prior to trial. To successfully assert an ineffective assistance of counsel claim, a defendant in a parental termination case must show that his or her counsel’s performance was deficient and that this deficiency prejudiced the defense. Id. at 545 (citing Strickland v. Washington, 466 U.S. 668, 687-88, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984)). The record indicates that Esmeralda’s counsel participated fully in all aspects of her defense, including objecting to the admission of evidence, cross-examining witnesses, and submitting a proposed jury charge. We therefore agree with the court of appeals that Esmeralda failed to demonstrate that her counsel’s performance was deficient. Additionally, Esmeralda failed to demonstrate that her counsel’s performance prejudiced her defense; she has not pointed to any specific evidence she could have produced to contradict TDPRS’s witnesses if her attorney had been given additional time to prepare. Accordingly, we hold that Esmeralda failed to prove that her counsel’s assistance was ineffective.

Finally, Esmeralda argues that the trial court erred in admitting TDPRS’s x-ray evidence without proper authentication because the x-rays were printed from a computer program that allowed alteration of the image. We agree with the court of appeals that the trial court did not err in admitting this evidence. We review a trial court’s decision to admit or exclude evidence for an abuse of discretion. See State v. Bristol Hotel Asset Co., 65 S.W.3d 638, 647 (Tex.2001). The requirement of authentication as a condition precedent to admissibility may be satisfied by “evidence sufficient to support a finding that the matter in question is what its proponent claims.” TEX. R. EVID. 901(a). In this case, TDPRS offered the testimony of a radiologist who worked at the hospital at which the disputed x-rays were taken. He testified that while the computer program could be used to crop the x-ray or adjust the brightness and contrast of the image, it could not add to or otherwise alter the x-ray. We hold that the trial court did not abuse its discretion in admitting the x-ray evidence.

For the foregoing reasons, and without hearing oral argument, we reverse the court of appeals’ judgment as to Lonnie and remand to the court of appeals to consider his factual sufficiency complaint. TEX.R.APP.P.59.1, 60.2(d). We affirm the court of appeals’ judgment as to Esmeralda. Id. 60.2(a).

      . To preserve the parties' privacy, we identify the parents by first name and the child by initials. See TEX. FAM. CODE § 109.002(d).

      . In the court of appeals, Lonnie challenged only the jury’s finding of grounds for termination under section 161.001(l)(d) of the Texas Family Code; he did not challenge the jury’s finding that termination was in the best interest of the child, nor did he challenge the appointment of Lonnie’s parents as J.P.B.’s permanent managing conservators. Accordingly, the only issue considered by the court of appeals and the only issue reviewed here as to Lonnie is whether there was sufficient evidence for the jury to find that Lonnie knowingly placed or knowingly allowed J.P.B. to remain in conditions or surroundings which endangered his physical or emotional well-being.


text:
    Royce B. WEST, Julia L.S. Gooden, a/k/a Julia L.S. Gooden-Wood, and Robinson West & Gooden, P.C., Petitioners v. Malcolm S. ROBINSON, Respondent.
    No. 04-0346.
    Supreme Court of Texas.
    Dec. 9, 2005.

      R. Kristin Weaver, Dallas, TX, for Petitioners.
    Mark M. Donheiser, Mathis & Donheiser, P.C., Dallas, TX, for Respondent.
   PER CURIAM.

Malcolm S. Robinson, Royce B. West, and Julia L.S. Gooden practiced law at Robinson West & Gooden P.C. Robinson filed suit against West, Gooden, and the corporation (collectively, West), alleging various causes of action and seeking dissolution of the corporation. West answered with a general denial and raised several counterclaims. The parties then filed a joint motion to abate, which stated:

1. Plaintiff and Defendants have both sued each other in the above referenced matter:
2. The parties however, have agreed and do hereby agree to arbitrate their disputes and dissolve the corporation to wit: Robinson West & Gooden P.C.

The trial court granted the motion and the parties proceeded to arbitration, but the arbitrator’s award did not dissolve the corporation. Over Robinson’s objection, the trial court confirmed the award. Robinson appealed, arguing that the arbitrator exceeded his authority by making an award that contravened the agreement to dissolve the corporation. West argued that the parties modified the arbitration agreement by submitting amended claims and counterclaims for arbitration pursuant to an agreement they reached with the arbitrator at a preliminary hearing. West also argued that Robinson waived any complaint about the scope of the arbitration agreement because Robinson did not object during the arbitration proceedings. The court of appeals concluded that the parties, in their joint motion to abate, entered into a binding Rule 11 agreement to dissolve the corporation and that the arbitrator exceeded his authority under that agreement. It reversed the trial court’s judgment and rendered judgment “compelling arbitration of the mechanics of the dissolution of the corporation.” 2004 WL 178586, at *3. The court’s opinion did not address whether the arbitration agreement was modified or whether Robinson waived his right to complain about its scope. West filed a motion for rehearing in which he argued that the court failed to address all the issues necessary to disposition of the appeal, as required by Texas Rule of Appellate Procedure 47.1.

Rule 47.1 provides: “The court of appeals must hand down a written opinion that is as brief as practicable but that addresses every issue raised and necessary to final disposition of the appeal.” TEX. R. APP. P. 47.1. While the court of appeals acknowledged that West asked the arbitrator not to dissolve the corporation, it failed to identify and expressly consider modification and waiver as distinct issues associated with the relief the parties requested from the arbitrator. 2004 WL 178586, at *1. Consequently, the court of appeals did not comply with Rule 47.1. See Tex. Disposal Sys., Inc. v. Perez, 80 S.W.3d 593, 594 (Tex.2002) (holding that the court of appeals erred in failing to consider an alternative basis asserted by the appellee to support its attorney’s fees award); Latham v. Castillo, 972 S.W.2d 66, 70 (Tex.1998) (concluding that the court of appeals erred in remanding appellants’ fraud and breach of contract claims without discussion). We have said that this provision is mandatory, and the courts of appeals are not at liberty to disregard it. See Lone Star Gas Co. v. R.R. Comm’n, 767 S.W.2d 709, 711 (Tex.1989) (citing to Texas Rule of Appellate Procedure 90(a), the predecessor to Rule 47.1, and remanding the case for the court of appeals to decide the validity of certain Railroad Commission rules). Accordingly, without hearing oral argument, we grant the petition for review, reverse the court of appeals’ judgment, and remand the case to that court for further proceedings consistent with this opinion. See TEX. R. APP. P. 59.1, 60.2(d).