author: Justice CASTILLO.

text:
    SSP PARTNERS and Metro Novelties, Inc., Appellants, v. GLADSTRONG INVESTMENTS (USA) CORPORATION, Appellee.
    No. 13-02-671-CV.
    Court of Appeals of Texas, Corpus Christi-Edinburg.
    April 7, 2005.
    Opinion Overruling Rehearing July 21, 2005.

      Rick Rogers, Jennifer R. Henderson, John J. Janssen, Porter Rogers Dahlman & Gordon, Corpus Christi, Roger W. Hughes, Scott T. Clark, Adams & Graham, L.L.P., Harlingen, for appellants.
    Carla M. Saenz, Carla Saenz & Associates, Brownsville, Thomas C. Wright, Julia L. Kurtz, The Wright Law Firm, Houston, Jose E. Garcia, Garcia & Villarreal, McAl-len, for appellee.
    Before Justices HINOJOSA, YÁÑEZ, and CASTILLO.
   OPINION

Opinion by

Justice CASTILLO.

This is an indemnity case. The trial court granted appellee Gladstrong Investments’ no-evidence summary-judgment motions against appellants SSP Partners and Metro Novelties. Asserting numerous issues, SSP and Metro appeal the judgments. SSP also appeals an award of guardian ad litem fees. We reverse and remand.

I. History of the Case

On January 9, 2001, a fire caused by an allegedly defective fighter killed Joshua Castillo. Joshua’s two brothers, Matthew and Christopher, were also injured in the fire. The children’s parents, Oscar and Arissa Castillo, claimed that Oscar’s sister, Sally, bought the offending lighter at a Circle K store. Oscar and Arissa Castillo brought a products liability action against SSP Partners, Inc. and Gladstrong Investments (USA) Corporation (“Glad-strong USA”). SSP then sued Metro Novelties, as supplier of the lighters, for indemnity. Additionally, SSP and Metro both sued Gladstrong USA for indemnity.

Gladstrong USA filed no-evidence motions for summary judgment against SSP and Metro on their indemnity claims, alleging there was no evidence that it was the manufacturer or supplier of the cigarette lighter. The trial court granted Gladstrong’s no-evidence motions for summary judgment against both SSP and Metro.

SSP and Metro also sued Tianjin Sico Lighters, Co., Ltd. (“Tianjin”), the alleged manufacturer of a component of the lighter. SSP and Metro also sought but failed to secure leave of court to sue the parent company of Gladstrong USA, Gladstrong Investments, Ltd. (“Gladstrong Hong Kong”). Claims against Tianjin were severed.

On October 24, 2002, Gladstrong USA settled with the Castillos. On the same date, the trial court granted the no-evidence summary-judgment motions. On October 28, 2002, the Castillos, SSP, and Metro proceeded to trial. The jury returned a verdict favorable to the Castillos. The trial court judgment memorialized: (1)the no-evidence summary judgments; and (2) the jury verdict. SSP, on appeal, seeks reversal of the summary judgment adverse to it and remand of its indemnity claim for trial on the merits. SSP presents the following issues for review:

(1) Whether the trial court erred in granting a no-evidence summary-judgment motion denying: (a) statutory indemnity to SSP on its claim that Gladstrong USA was either the manufacturer or the supplier of the lighter; and (b) common law indemnity.
(2) Whether the guardian ad litem fees were reasonable.

On appeal, Metro seeks reversal of the summary judgment adverse to it, and presents the following issues for review:

(1) Whether the trial court erred in granting a no-evidence summary-judgment motion that Metro take nothing on its indemnity claims against Gladstrong USA;
(2) Whether, under traditional summary-judgment motion standards, Glad-strong USA’s evidence proved Glad-strong USA was neither a manufacturer nor a supplier of the lighter;
(3) Whether Metro’s proof showed that it was entitled to indemnity under Texas Civil Practice & Remedies Code § 82.002 against Gladstrong USA because Gladstrong USA is: (a) a “manufacturer” under § 81.001(4); (b) jointly liable with Gladstrong Hong Kong under the “single business enterprise” theory of liability; and (c) deemed to be a manufacturer under 15 U.S.C. § 2052(a)(4);
(4) Whether Metro’s proof showed it was entitled to common law indemnity because Gladstrong USA was a supplier, a manufacturer, or an apparent manufacturer; and
(5) Whether Gladstrong USA waived objections to Metro’s summary-judgment evidence.

II. The Summary Judgments

On October 24, 2002, the same day SSP filed its response to Gladstrong USA’s no-evidence summary-judgment motion, Glad-strong USA filed a reply objecting to SSP’s evidence. After a hearing on the same date, the trial court granted Glad-strong USA’s motion. On October 28, 2002, Gladstrong USA filed a virtually identical no-evidence motion for summary judgment as to Metro. Metro filed its response, which was virtually identical to SSP’s response and included the same evidence, on December 12, 2002. Gladstrong USA replied to Metro’s response on February 6, 2003. That reply mirrored the arguments raised in opposition to SSP’s claim for indemnity. To the reply, Glad-strong USA attached deposition excerpts. On February 12, 2003, Gladstrong USA filed objections to Metro’s evidence which echoed the objections made to SSP’s evidence. The trial court held the hearing on the motion for summary judgment on February 13, 2003 and granted the motion. Both the summary judgments against SSP and against Metro were memorialized in the court’s final judgment dated February 13, 2003.

In each motion, Gladstrong USA asserted that there was no evidence as a matter of law that Gladstrong USA was a manufacturer or supplier of the fighter: (1) to Metro, or (2) in the marketing chain. To its motion against SSP, Gladstrong USA attached a copy of SSP’s live amended answer, including its cross-claim, and SSP’s third-party petition against Tianjin. To its motion against Metro, Gladstrong USA attached a copy of Metro’s five cross-claims against Gladstrong USA and Metro’s five cross-claim against third-party defendant Tianjin.

The fact the answers and petitions were attached to the no-evidence motions for summary judgment is of no consequence. Pleadings do not constitute summary judgment proof. Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979) (citing Hidalgo v. Sur. Sav. & Loan Ass’n., 462 S.W.2d 540, 543 (Tex. 1971)). In addition, the Texas Supreme Court has stated that it disapproves of decisions that hold or imply that, if a party attaches evidence to a motion for summary judgment, any request for summary judgment under Rule 166a(i) will be disregarded. Binur v. Jacobo, 135 S.W.3d 646, 650-51 n. 11 (Tex.2004).

Each motion specifically pointed to Texas Rule of Civil Procedure 166a(i) for its basis. Tex.R. Civ. P. 166a(i). Each motion states “there is no evidence as a matter of law that Defendant Gladstrong was the manufacturer of the cigarette fighter made the basis of this lawsuit, nor is there evidence that Gladstrong was a supplier of the lighter in question to Circle K

We conclude that the two referenced summary-judgment motions constituted no-evidence motions and not traditional motions for summary judgment.

A.No-Evidence Summary-Judgment Standard of Review

The standard of review for the grant of a motion for summary judgment is determined by whether the motion was brought on no-evidence or traditional grounds. See Tex.R. Civ. P. 166a(i), (c); see also Ortega v. City Nat’l Bank, 97 S.W.3d 765, 771 (Tex.App.-Corpus Christi 2003, no pet.) (op. on reh’g). A no-evidence motion for summary judgment asserts there is no evidence of one or more essential elements of claims upon which the opposing party would have the burden of proof at trial. Tex.R. Civ. P. 166a(i). A no-evidence motion for summary judgment is properly granted only if the non-movant fails to bring forth more than a scintilla of probative evidence to raise a genuine issue of material fact as to the challenged element of the claims. See id.; Mulvey v. Mobil Producing Tex. & N.M. Inc., 147 S.W.3d 594, 605 (Tex.App.-Corpus Christi, 2004, no pet.) (citing AMS Constr. Co. v. Warm Springs Rehab. Found., 94 S.W.3d 152, 159 (Tex.App.-Corpus Christi 2002, no pet.)).

B.Summary-Judgment Evidence

SSP attached evidence to its response to Gladstrong USA’s no-evidence motion for summary judgment. The evidence included: (1) deposition excerpts of Arissa, Sally, and Oscar Castillo;(2) deposition excerpts of Teresa Truscelli of the Uniform Code Council (UCC) with attached application of and correspondence with Gladstrong Hong Kong; (3) deposition excerpts of Welsley Li, principal representative of Gladstrong USA, with attached safety recall notice and information from Gladstrong Hong Kong’s internet home page; (4) the affidavit of Ben Zhu, counsel for Tianjin, with attached business records of Tianjin; (5) deposition excerpts of Kin Chung Li, President of Gladstrong Hong Kong and Glad-strong USA with accompanying business records of Gladstrong USA; and (6) photographs of the fighter. Metro attached the same evidence to its summary-judgment response.

C.Waiver

In its fifth issue, Metro asserts that Gladstrong USA waived its objections to Metro’s summary-judgment evidence because: (1) it failed to obtain a ruling and failed to object to the absence of a ruling; (2) any implicit ruling must be deemed to have overruled Gladstrong USA’s objection; (3) the objections were untimely; and (4) Metro’s summary-judgment evidence included five named exhibits, properly authenticated as business records of the Uniform Code Council, containing applications which reflected Gladstrong Hong Kong’s admission that it manufactured the fighter in question.

Gladstrong USA objected to exhibits E-1 through E-4, stating those documents were not properly authenticated and constituted hearsay. These exhibits were attached to the affidavit of Teresa Truscelli of the UCC. Exhibit E-l is titled “Application for Universal Product Code and Uniform Code Council, Inc. Membership.” Exhibit E-2 is a letter from the UCC to Gladstrong Hong Kong regarding UPC manufacturer identification numbers. E-3 is a letter from Gladstrong Hong Kong to the UCC Council inquiring as to change of UPC number. E-4 is a series of communications between Gladstrong Hong Kong and the UCC Council regarding inquiries about numbers for an expanded line of lighters.

Gladstrong USA objected to exhibit F-2 as not being properly authenticated and constituting hearsay evidence. Exhibit F-2 is a copy of information posted on Glad-strong Hong Kong’s internet home page. The exhibit was attached to the deposition excerpt of Wesley Li of Gladstrong Hong Kong. Gladstrong USA also objected to the affidavit of Ben Zhu, Tianjin’s attorney, because it was not based on personal knowledge. In addition, Gladstrong USA objected because Metro did not attach any exhibits to affidavits. Gladstrong USA objected to exhibits H-3 through H-5 because the documents were not properly authenticated and constituted hearsay. These documents were exhibits at the depositions of Kin Chung Li. Exhibit H-3 is another hard copy of the items appearing on the Gladstrong website, showing pictures of the lighters. H-4 is a letter to the Hong-Kong Article Numbering Association, requesting product numbers for Glad-strong products. H-5 is a description and order notification letter from Gladstrong to Sico Lighters Co., Ltd.

A trial court does not implicitly sustain, by granting the motion, a summary judgment movant’s objections where there is no ruling or order. Jones v. Ray Ins. Agency, 59 S.W.3d 739, 752 (Tex.App.Corpus Christi 2001, pet. denied). For there to be an implicit ruling on a party’s objection to summary-judgment evidence, some indication must appear in the record or in the summary judgment itself, other than the mere granting of the summary judgment, that the trial court ruled on the objection. Id. at 753 (citing Tex.R.App. P. 33.1(a)(2)(A) and holding that a trial court must either expressly or implicitly rule on objection for complaint to be preserved for review); see also Columbia Rio Grande Reg’l Hosp. v. Stover, 17 S.W.3d 387, 395 (Tex.App.-Corpus Christi 2000, no pet.).

In order to preserve any error of the trial court in ruling on its objections, Gladstrong USA was required to obtain a written order on the ruling. See Ray Ins. Agency, 59 S.W.3d at 753. Metro urges that appellee did not do so. The record in this case does not reveal an order on the objections. While the final judgment in this case included a “Mother Hubbard” clause, the presence or absence of a “Mother Hubbard” clause in a summary judgment is of no import to show the trial court implicitly ruled on objections. See Well Solutions, Inc. v. Stafford, 32 S.W.3d 313, 317 (Tex.App.-San Antonio 2000, no pet.) (stating that a Mother Hubbard clause operates on claims, not objections to summary judgment evidence). We conclude that Gladstrong USA did not preserve error for appeal. We sustain Metro’s fifth issue.

D. The Summary-Judgment Issues

1. Propriety of “No-Evidence” Summary Judgment

In its second issue, Metro argues that a “no-evidence” summary judgment was improper because Gladstrong USA retained the burden of proof to avoid the duty to indemnify. When a motion for summary judgment is based on no-evidence grounds, the Texas Supreme Court has ordered that the courts apply these rules in light of the following: the no-evidence motion can only be brought against a claim or defense on which an adverse party would have the burden of proof at trial under Texas rule of civil procedure 166a(i). Oasis Oil Corp. v. Koch Ref. Co. L.P., 60 S.W.3d 248, 252 (Tex.App.-Corpus Christi 2001, pet. denied); see Tex.R. Civ. P. 166a(i). Glad-strong USA counters that the claimant retained the burden to prove Gladstrong USA is a statutory seller which suffered a qualifying loss in a products liability action, as defined by statute, and that the defendant qualifies as a statutory manufacturer. See Oasis Oil Corp., 60 S.W.3d at 255 (listing elements of statutory claim for indemnity in a product liability case). Gladstrong USA asserts the cases cited by SSP to shift the burden relate to the exception to the statutory rule — they stand for the proposition that when a manufacturer seeks to avoid liability to a seller, the manufacturer bears the burden to show that the seller is not innocent and that its independent conduct resulted in the plaintiffs injury. See id. at 254. Finally, Glad-strong USA argues that a seller retains at all times the burden to prove that a defendant to an indemnity claim qualifies as a manufacturer.

We conclude that establishing Gladstrong USA’s status as the manufacturer is an element of SSP’s and Metro’s claim for indemnity on which they bore the burden of proof. See id. at 255. Therefore, Gladstrong USA properly brought no-evidence summary-judgment motions against SSP and Metro on this basis. We overrule Metro’s second issue.

2. Statutory Indemnity

Gladstrong USA moved for and was granted summary judgment in all respects, including as to SSP and Metro’s claims for statutory indemnity pursuant to section 82.002 of the civil practice and remedies code. Tex. Civ. PRAC. & Rem.Code Ann. § 82.002 (Vernon 1997). SSP and Metro each contend on appeal that there is evidence regarding the availability of statutory indemnity. This section of the law provides:

§ 82.002. Manufacturer’s Duty to Indemnify
(a) A manufacturer shall indemnify and hold harmless a seller against loss arising out of a products liability action, except for any loss caused by the seller’s negligence, intentional misconduct, or other act or omission, such as negligently modifying or altering the product, for which the seller is independently liable.
(b) For purposes of this section, “loss” includes court costs and other reasonable expenses, reasonable attorney fees, and any reasonable damages.
(c) Damages awarded by the trier of fact shall, on final judgment, be deemed reasonable for purposes of this section.
(d) For purposes of this section, a wholesale distributor or retail seller who completely or partially assembles a product in accordance with the manufacturer’s instructions shall be considered a seller.
(e) The duty to indemnify under this section:
(1) applies without regard to the manner in which the action is concluded; and
(2) is in addition to any duty to indemnify established by law, contract, or otherwise.
(f) A seller eligible for indemnification under this section shall give reasonable notice to the manufacturer of a product claimed in a petition or complaint to be defective, unless the manufacturer has been served as a party or otherwise has actual notice of the action.
(g) A seller is entitled to recover from the manufacturer court costs and other reasonable expenses, reasonable attorney fees, and any reasonable damages incurred by the seller to enforce the seller’s right to indemnification under this section.

Tex. Civ. PRAC. & Rem.Code Ann. § 82.002 (Vernon 1997).

As this appeal was taken from a no-evidence summary judgment, the non-movants, SSP and Metro, had the burden to produce at least a scintilla of evidence as to every element of the claim. Mulvey, 147 S.W.3d at 605. Therefore, SSP and Metro had the burden to show that: (1) SSP and Metro were statutory sellers; (2) they suffered a qualifying loss; (3) the loss was suffered in a products liability action as defined by statute; and (4) Gladstrong USA qualifies as a statutory manufacturer. Oasis Oil Corp., 60 S.W.3d at 255. Glad-strong USA’s motions both urge “there is no evidence as a matter of law that Defendant Gladstrong was the manufacturer of the cigarette lighter, nor is there evidence that Gladstrong was a supplier of the lighter in question to [SSP].”

SSP and Metro have each argued that Gladstrong USA was a manufacturer of the fighter under section 82.001(4) of the civil practice & remedies code. Tex. Civ. PRAC. & Rem.Code Ann. § 82.001(4) (Vernon 1997). Under section 82.001(4), a “manufacturer” is defined as “any person who is a designer, formulator, constructor, re-builder, fabricator, producer, compounder, processor, or assembler of any product or any component part thereof and who places the product or any component part thereof in the stream of commerce.” See id.

Evidence presented by SSP and Metro reflects that the fighter involved in the fire was a WAX brand fighter, purchased at a Circle K store. That evidence also reflects that the fighter exhibited the Uniform Product Code (“UPC”) uniquely assigned to Gladstrong Hong Kong. In addition, evidence shows that: (1) Glad-strong USA is the sole supplier, distributor, and importer of the WAX fighter into the United States; (2) the sales manager for Gladstrong USA is Ms. Li, daughter of Gladstrong Hong Kong founder Kin Chun Li; (3) Ms. Li was involved in discussions with the U.S. Consumer Products Safety Commission (“CPSC”), after which Glad-strong USA issued a voluntary recall of the WAX fighters; (4) no companies other than Gladstrong USA and Gladstrong Hong. Kong were involved in the recall; (5) the recall notice was printed on Gladstrong USA letterhead; (6) that notice included Gladstrong USA’s admission that it had distributed the defective fighters and that additional letter posters would be forthcoming encouraging customers to mail the fighters in for a refund; and (7) Glad-strong Hong Kong was identified as the company to which fighters should be sent, and the company which would issue any refunds.

a. Single Business Enterprise and Statutory Indemnity

SSP and Metro contend that Glad-strong USA and Gladstrong Hong Kong are a single business entity, enabling the use of evidence that Gladstrong Hong Kong is the manufacturer of the fighters to establish that Gladstrong USA is the manufacturer. They urge that the two Gladstrongs must be held to be a single business entity or an injustice will result.

Summary-judgment evidence reflects that Chung Li is the president of both Gladstrong USA and Gladstrong Hong Kong, and controls the decisions made by both companies. Deposition testimony of Mr. Li, and of his daughter, Welsley Li, establishes the two Gladstrong entities as a family-based operation with offices in the United States and Hong Kong. The officers of both corporations are the same. Other than Mr. Li’s wife and daughter, there is only one other person employed in the United States. Mr. Li further testified that Gladstrong USA was established as a means to more efficiently export/import lighters to the USA, and that such importation is Gladstrong USA’s principal business. United States companies order lighters through Gladstrong USA, which forwards those orders to Gladstrong Hong Kong. Gladstrong USA was entirely capitalized by Gladstrong Hong Kong. All Gladstrong USA revenues pass directly to Gladstrong Hong Kong. Gladstrong Hong Kong funded the costs of the safety recall. With respect to that recall, Gladstrong Hong Kong hired an engineer to design the safety wheels used to ensure that the WAX lighters would be safe; Gladstrong Hong Kong also owns the patent for that safety wheel. Gladstrong Hong Kong directs use of these wheels and in fact designates how the lighters are to be built. In addition, Gladstrong Hong Kong directed the redesign of the fighter after the recall so that it would meet U.S. safety standards. Mr. Li admitted he was aware that Gladstrong Hong Kong was known as a manufacturer of fighters.

Additional evidence was offered to show that Gladstrong USA and Gladstrong Hong Kong are in fact a single business entity. Metro, on appeal, points out that: (1) both entities have similar names (“Gladstrong Investment Corporation USA” and “Gladstrong Investment, Limited” [“Gladstrong Hong Kong”]); (2) Glad-strong USA solicits orders for Gladstrong Hong Kong and collects the latter’s money; (3) Gladstrong USA attends trade shows to promote Gladstrong Hong Kong’s fighters; (4) Mir. Li’s daughter ran Glad-strong USA without pay for an extended period of time until it was decided she merited salary compensation; and (5) Gladstrong Hong Kong described Glad-strong USA’s office as a “branch office.” The allocation of profits between the two corporations was unclear.

SSP filed a Motion for Leave to File Third Party Petition against Gladstrong Hong Kong on June 27, 2002. SSP later filed a Motion to join Gladstrong Hong Kong as Necessary Party, or in the Alternative, Motion to Reconsider SSP Partners’ Motion for Leave to File Third-Party Petition Against Gladstrong Investments, Ltd. Despite these actions, Gladstrong Hong Kong was never made a party to this case.

Numerous cases support the single business enterprise theory in the context where both parties have been named as parties to the suit. See S. Union Co. v. City of Edinburg, 129 S.W.3d 74, 85-86 (Tex.2003) (RGVG, Valero Energy Corporation, Valero Transmission Company, Valero Natural Gas Company, and Reata Industrial Gas Company operated as a single business enterprise but were all named as parties to the case); Bridgestone Corp. v. Lopez, 131 S.W.3d 670, 676 (Tex.App.-Corpus Christi 2004, pet. granted, judgm’t vacated w.r.m.) (appellees’ allegations against Bridgestone included claims that Bridgestone and Firestone were operated as a single business enterprise, but both were parties in the suit); North Am. Van Lines, Inc. v. Emmons, 50 S.W.3d 103, 119-20 (Tex.App.-Beaumont 2001, pet. denied) (North American Van Lines, Inc., and North American Van Lines of Texas, Inc. were both named as defendants, as opposing party sought to have them considered as a single business entity); Castle Tex. Prod. L.P. v. Long Trusts, 134 S.W.3d 267, 272 (Tex.App.-Tyler 2003, pet. denied) (the Long Trusts sued Castle Energy, Castle Pipeline, and CEC as defendants, alleging they operated as a single business enterprise). However, even if this theory were sufficiently supported by the facts, we did not find, nor were we directed to, any authority supporting this form of liability where each of the entities alleged to constitute a single business entity was not at least, at some point, made a party to the case.

b. “Apparent Manufacturer” and Statutory Indemnity

SSP and Metro assert that, even if Gladstrong USA did not actually manufacture the lighter and cannot be deemed to be the manufacturer by statute, Glad-strong USA is still hable as the apparent manufacturer (emphasis added). Under this doctrine, one who puts out, as its own product, chattel manufactured by another is subject to the same liability as though it were the manufacturer. See, e.g., Sears, Roebuck, and Co. v. Black, 708 S.W.2d 925, 928 (Tex.App.-Eastland 1986, no writ) (holding Sears was not insulated from liability, where Sears instructed Whirlpool to put Sears’ name on a Whirlpool washer even though it was not manufactured by Sears).

There are two ways an actor can put out chattel as his own product: (1) by appearing to be the manufacturer, and (2) where the chattel appears to have been made specifically for the actor. Jackson v. Coldspring Terrace Prop. Owners Ass’n, 939 S.W.2d 762, 765 (Tex.App.-Houston [14th Dist.] 1997, writ denied). SSP and Metro assert that, not only does Glad-strong USA appear to be the manufacturer but also, the evidence reflects that the lighters were made for, and at the direction of, Gladstrong USA. Importantly, summary judgment evidence includes Mr. Li’s admission that he holds Gladstrong USA out to be the manufacturer so that customers will believe the price is lower. More than a scintilla of evidence exists to suggest that Gladstrong USA “appeared” to be the manufacturer.

Case law prior to the adoption of chapter 82 of the Texas Civil Practice and Remedies Code addresses numerous circumstances where household-name suppliers placed their commonly-known name on products they did not manufacture, and were found to be apparent manufacturers. See Ford Motor Co. v. Mathis, 322 F.2d 267, 273 (5th Cir.1963) (where the household name “Ford” was present on the truck in question); Sears, Roebuck & Co., 708 S.W.2d at 928 (where household name “Sears” appeared on washing machine); Maint. & Equip. Contractors v. John Deere Co., 554 S.W.2d 28, 31-32 (Tex.Civ. App.-Houston [14th Dist.] 1977, writ dism’d w.o.j.) (where the household name “John Deere” was displayed on a tractor that was bought from a John Deere retailer).

Case law reflects that such liability will not attach where the product is not marketed under the name of the supplier, if the supplier also has no connection with the final defective product or its manufacturer. See Stanford v. Dairy Queen Prods, of Tex., 623 S.W.2d 797, 805-06 (Tex.Civ.App.-Austin 1981, writ ref'd n.r.e.). In Stanford, the court noted:

The record establishes as a matter of law that a restaurant employee in Bur-net, Texas ‘Dairy Queen’ was the literal ‘manufacturer’ of the sandwich in the sense of actually assembling the various ingredients of the sandwich, processing them and preparing the sandwich from its various ingredients. Moreover, [Dairy Queen] was not the actual vendor of the sandwich....

Id.; see also Better Beverages, Inc. v. Meschwitz, 643 S.W.2d 502, 504 (Tex.App.Houston [14th Dist.] 1982, no writ) (where, despite the fact that the Dr. Pepper trademark was carried on the bottle’s label, Dr. Pepper was not involved in the processing, bottling or capping of the bottle that caused the injuries, and although Dr. Pepper furnished the manufacturer with the syrup that was used, there was no allegation that the syrup caused the bottle top to fly off. Dr. Pepper therefore had not participated in the manufacturing process). In these cases, it was established that the supplier had no connection to the final manufactured product; they are therefore distinguishable from the matter before this Court.

Here, although Gladstrong USA did not place its own name on the product itself, more than a scintilla of evidence suggests it was nevertheless closely involved in the importation, marketing and distribution of the lighter and that it participated significantly in the issues related to the recall and subsequent redesign of the product. Furthermore, Mr. Li’s testimony indicates that he, either individually or in his capacity as an officer and director of Gladstrong Hong Kong, deliberately holds Gladstrong USA out to be the manufacturer so that customers will believe the price is lower.

Under Texas law, strict liability is triggered where evidence establishes that the defendant placed the product into the stream of commerce, and the defective product was a producing cause of the plaintiffs damages. Rourke v. Garza, 530 S.W.2d 794, 798 (Tex.1975). Rourke extended this doctrine to include persons engaged in the business of leasing products to third parties. Id. at 800. The extension is based on the principle that “[w]here one is engaged in the business of introducing products into the channels of commerce, he will be subject to strict liability for physical harm caused by such products if they are unreasonably dangerous to the user or consumer whether he sells or leases his products.” Id.; see also Willowbrook Foods, Inc. v. Grinnell Corp., 147 S.W.3d 492, 496 (Tex.App.-San Antonio 2004, pet. filed) (citing Armstrong Rubber Co. v. Urquidez, 570 S.W.2d 374, 375-76 (Tex.1978)).

The principle expressed in Rourke is applicable here. More than a scintilla of evidence reflects that Gladstrong USA was significantly involved in the marketing and distribution of the defective product, that it placed this product into the stream of commerce in the United States, and that it benefitted from that placement. This evidence also serves to underscore the close interaction between Gladstrong USA and Gladstrong Hong Kong and Gladstrong USA’s role as apparent manufacturer of the lighter. More than a scintilla of evidence exists, sufficient to defeat a no-evidence motion for summary judgment, that Gladstrong USA was the apparent manufacturer of the lighter as that doctrine is understood and applied.

As recently as 1990, the supreme court visited this issue, albeit in a slightly different context:

I note that a non-manufacturer may, under certain circumstances, be liable in the same manner as a manufacturer or seller of a defective product. See ReSTATEMENT (SECOND) OF TORTS § 400 (1965) (Selling as Own Product Chattel Made by Another). For example, a trademark licensor may be liable as an apparent manufacturer when the li-censor is significantly involved in the manufacturing, marketing, or distribution of the defective product. See Torres v. Goodyear Tire & Rubber Co., 163 Ariz. 88, 786 P.2d 939, 945 (Ariz.1990) (trademark licensor that significantly participates in the overall process by which the product reaches consumers, and who has the right to control the incidents of manufacture or distribution is hable under section 402A of the Restatement); Burkert v. Petrol Plus, 216 Conn. 65, 579 A.2d 26, 35 (Conn.1990) (trademark licensor, absent any involvement in the production, marketing, or distribution of defective product, is not liable in strict tort liability or negligence); Connelly v. Uniroyal, Inc., 75 Ill.2d 393, 389 N.E.2d 155, 163, 27 Ill. Dec. 343 (Ill.1979) (trademark licensor liable in strict liability as integral part of the marketing enterprise and participation in the profits reaped by placing a defective product in the stream of commerce); Stanford v. Dairy Queen Prods., 623 S.W.2d 797, 805 (TexApp.-Austin 1981, writ ref d n.r.e.) (trademark licensor that only authorized use of trade name was not an “actual vendor” of the defective product under section 400 of the Restatement); see also Rockwell, Annotation, Trademark Licensor’s Liability for Injury or Death Allegedly Due to Defect in Licensed Product, 90 A.L.R.4th 981 (1990); Keeton et ah, PROSSER & Keeton on the Law of Torts § 100 (5th ed.1984) (strict liability may extend to licensor who participates in the construction and sale of products made pursuant to a patent). But a mere designer of a defective product is not liable in strict liability because the apparent manufacturer doctrine does not apply when the party is not involved in the manufacture, sale, or installation of the product. Affiliated FM Ins. Co. v. Trane Co., 831 F.2d 153, 155-56 (7th Cir.1987).

Firestone Steel Prods. Co. v. Barajas, 927 S.W.2d 608, 617-18 (Tex.1996) (Enoch, J., dissenting) (concurring with the majority on this issue but expanding the analysis of apparent manufacturer). The principles addressed by Justice Enoch in his dissent (though based on different grounds) nevertheless apply well here, particularly as they address the continuing doctrine of “apparent manufacturer” and in light of Texas’ clear adoption of the Restatement of Torts (Second) sections 400 and 402A.

Although we find that the doctrine of apparent manufacturer survives, it does not appear to be applicable under the specific statutory definition of “manufacturer” provided in section 82.001(4) of the civil practice and remedies code.

3. Common Law Indemnity

We next examine whether the doctrine of “apparent manufacturer” remains available in conjunction with common law indemnity. Metro insists that Gladstrong USA did not urge summary judgment on common law indemnity grounds. To the contrary, Gladstrong USA’s no-evidence motion for summary judgment as to Metro’s claim for indemnity states:

Even if under Texas common law Glad-strong [USA] would owe a duty to indemnify Metro because of Gladstrong’s role as a supplier, there has been no evidence whatsoever showing that Glad-strong was the supplier in the marketing chain of the defective product in question.

We may therefore turn to SSP and Metro’s complaint that the trial court erred in granting summary judgment as to their common law indemnity claims. We will find error if common law indemnity applies in the context of this case, because we have already determined that there is more than a scintilla of evidence that Glad-strong USA was the apparent manufacturer.

In a products liability action, a defendant will be held liable based upon proof that it placed the product into the stream of commerce and upon further proof that the defective product was a producing cause of the claimant’s damages. Firestone, 927 S.W.2d at 613. Strict liability claims may be asserted against “innocent sellers who have no culpable responsibility except for their role as an intermediary seller that merely received a defective product and unknowingly sold it down the stream of commerce.” Oasis Oil Corp., 60 S.W.3d at 253. Accordingly, “to balance the right of consumers to sue any party who placed a product into the stream of commerce against the potential unfairness of subjecting significant financial liability upon an ‘innocent seller,’ the Texas Legislature created a statutory right to indemnification.” Id.

Even before the adoption of chapter 82, the availability of common-law indemnity was extremely limited. However, two exceptions have survived adoption of the statute, one in the context of products liability actions to protect an innocent retailer in the chain of distribution. Fed. Petroleum Co. v. Gas Equip. Co., 105 S.W.3d 281, 285 (Tex.App.-Corpus Christi 2003, no pet.) (common-law indemnity survives in claims by innocent retailers against manufacturers).

In Federal, this Court declined to extend that indemnity as between a retailer and a supplier who did not also produce a defectively designed or manufactured product. Id. at 286. However, in Federal, there was no suggestion that the upstream supplier was the “apparent manufacturer” and therefore a “producer” of the product. There was no suggestion that the supplier had been “held out” to be the manufacturer in order to entice additional purchases.

Further, section 82.002(e) of the civil practice & remedies code specifically provides that the statutory duty of a manufacturer to indemnify an innocent seller “is in addition to any duty to indemnify established by law, contract, or otherwise.” Tex. Civ. Prag. & Rem.Code Ann. § 82.002(e). As noted by Justice Enoch in Firestone, 927 S.W.2d at 617-18, the law is directed to protecting innocent sellers from liability where a manufacturer or supplier has been significantly involved in the manufacturing, marketing, or distribution of the defective product. We believe such is the case here, and that to find otherwise would be to abrogate the clear intent of both the common law and the statutory scheme. We therefore conclude that the common law duty to indemnify remains viable and is applicable in the context of this case.

We have determined that the doctrine of apparent authority survives, as does common law indemnity in limited circumstances. Evidence tendered by SSP and Metro demonstrates that Gladstrong USA, although perhaps not the “manufacturer” as defined under the statute, is so closely allied with the manufacturer as to be virtually indistinguishable from it, and that the company has been deliberately “held out” as the manufacturer of the product in order to entice additional consumer sales. Evidence further exists to suggest that Gladstrong USA was involved in the importation and marketing of the lighter. We therefore conclude that SSP and Metro have satisfied their burden of proof to tender more than a scintilla of evidence as to the challenged element of their indemnity claims, namely, that Gladstrong USA is the manufacturer of the lighter. We conclude that the evidence is more than a scintilla and sufficient to defeat a no-evidence motion for summary judgment. Our conclusion is limited to the facts of this case.

III. Conclusion

We sustain SSP’s second issue on appeal. We sustain Metro’s fourth issue on appeal. We reverse the trial court on these issues and remand for further proceedings. Because of our disposition, we need not address SSP’s and Metro’s remaining issues. Tex.R.App. P. 47.1.

OPINION ON MOTION FOR REHEARING

Appellants SSP Partners (“SSP”) and Metro Novelties, Inc. (“Metro”) and Appel-lee Gladstrong Investments (USA) Corp. (“Gladstrong”) have all filed motions for rehearing.

Appellee Gladstrong asserts that the common law doctrine of “apparent manufacturer” is inconsistent with the statutory scheme of indemnity between manufacturers and sellers and did not survive enactment of the statute. Gladstrong therefore requests that we reconsider our previous ruling and affirm the trial court’s no-evidence summary judgment for Gladstrong.

Appellant Metro asserts that the single business enterprise theory does not require joinder of all its members and that the failure to join Gladstrong Hong Kong is not a proper basis on which to reject that theory. Metro further urges that Gladstrong qualifies in its own right as a statutory manufacturer, relying on the Federal Consumer Products Safety Act and enabling regulations rather than the Texas statutory language presented in section 82.001(4) of the Texas Civil Practice and Remedies Code. Tex. Civ. PRAC. & Rem. Code Ann. § 82.001(4) (Vernon 2005). Metro further argues that the claim for common law indemnity should be remanded on all grounds, including status as an “upstream supplier,” rather than solely on the basis of “apparent manufacturer.” Metro has also moved this Court to supplement the record.

Appellant SSP similarly argues that (1) it was not necessary to make Gladstrong Hong Kong a party to the underlying suit in order for the claim of single business enterprise to be viable, and (2) Gladstrong qualifies in its own right as a statutory manufacturer. SSP also argues that we erroneously failed to reach the issue of guardian ad litem fees and urges that the motion for rehearing be granted because all dispositive issues were not addressed.

Metro and SSP seek to employ the single business enterprise doctrine to have Gladstrong USA stand in the shoes of Gladstrong Hong Kong and be vicariously hable for Gladstrong Hong Kong’s potential direct liability, particularly on their indemnity claim. We have reviewed the cases cited for the proposition that joinder of Gladstrong Hong Kong was not required as a prerequisite to presenting a viable claim under the single business enterprise theory. We nevertheless find those cases to be distinguishable.

Texas recognizes the “single business enterprise doctrine” to prevent an entity from relying upon corporate form to evade an existing debt or legal obligation. See Paramount Petroleum Corp. v. Taylor Rental Ctr., 712 S.W.2d 534, 536 (Tex. App.-Houston [14th Dist.] 1986, writ ref d n.r.e.) (sufficient evidence to support the single business enterprise theory, as well as the theory of partnership by estoppel, to permit recovery on outstanding invoices); Byrne v. Harris Adacom Network Servs., 11 S.W.3d 244, 247-48 (Tex.App.-Texarkana 1999, pet. denied) (discussing that allegations included single business enterprise as well as piercing of corporate veil in order to collect on outstanding promissory notes).

In Wildridge v. IER, Inc., 65 F.Supp.2d 429, 431 (N.D.Tex.1999), the court denied joinder of a foreign entity but did permit the plaintiff to rely on the single business enterprise theory for the purpose of establishing a sufficient number of employees to trigger application of Title VII for her employment discrimination claim. However, recovery was sought against the named defendant that was alleged to be directly liable.

In re U-Haul Intl., Inc., 87 S.W.3d 653 (Tex.App.-San Antonio 2002, orig. proceeding) derived from a personal injury claim, rather than an already-existing legal obligation, but the question before the court on mandamus involved a discovery dispute and whether or not documents could be compelled from corporate affiliates and subsidiaries. Id. at 656. The plaintiff seeking the discovery relied upon the single business enterprise theory but failed to meet its burden to establish possession, custody or control. Id. at 657. In re Western Star Trucks US, Inc., 112 S.W.3d 756 (Tex.App.-Eastland 2003, orig. proceeding), another mandamus action, similarly involved an effort to obtain discovery, but this time from a named defendant. Id. at 760. In issue was whether corporate form was being relied upon to avoid existing corporate debts and liabilities, joint and several liability, and whether net worth of a named defendant was discoverable based upon the single business enterprise theory. Id. at 760-61. Mandamus was granted to rescind the trial court order deeming a finding of joint and several liability, and to address issues relating to a deposition; net worth was discoverable. Id. at 764, 766.

The cases cited by Metro and SSP are therefore distinguishable on a variety of grounds. Even if the single business enterprise doctrine does not require that Gladstrong Hong Kong be a party to the suit, we decline to further extend the doctrine as currently understood, by analogy or otherwise, to the circumstances of this case where Metro and SSP seek to hold a named defendant vicariously liable for the potentially wrongful acts or conduct of a non-party.

We further note the issue of guardian ad litem fees. Because determination of which party or entity is ultimately liable for those fees may be altered upon remand, we decline to find that this issue is ripe for consideration.

We deny Gladstrong’s motion for rehearing. We reconsider our denial of the motion to supplement the clerk’s record, withdraw the denial, and grant the motion to supplement the record. We deny Metro’s motion for rehearing. We deny SSP’s motion for rehearing.

      .The Castillos sued individually and on behalf of the estate of Joshua Castillo, deceased, and as next friends of Christopher and Matthew Castillo. They originally brought suit naming Circle K Stores, Inc. and Circle K. Enterprises, Inc., who initially appeared in the suit. In its second amended answer and its third party petition against Metro, SSP subsequently identified itself as the proper defendant, asserting that it had been improperly named as Circle K. Stores, Inc. and Circle K. Enterprises, Inc.

      . Plaintiff alleged that Gladstrong USA manufactured the cigarette lighter.

      . Gladstrong USA urged there was no evidence that it was a manufacturer (as required forstatutory indemnity) and no evidence that it was a supplier in the marketing chain (as required under common law indemnity).

      . The record reflects no formal order either granting or denying the parties’ motion to add this entity as a defendant.

      . By a Rule 11 agreement, the parties agreed to shorten the time for notice of hearing and for filing the response.

      . All these pleadings are similarly directed to or include the names Circle K Stores, Inc., and Circle K Enterprises, Inc. instead of SSP.

      . We note again that Metro and SSP each tendered the same evidence.

      . The evidence reflects that, in order for a company manufacturing a product in a foreign country to import that product to the United States, it must obtain a unique product code from the UCC.

      . As noted earlier, SSP and Metro each tendered virtually identical summary judgment evidence.

      . As noted earlier, no order directly on this issue is apparent in the record.

      . We would further note that neither SSP nor Metro raised claims of alter ego in their pleadings.

        .Firestone clearly addressed and was decided on different issues, principally whether or not a manufacturer who developed a design idea that was copied and then modified by another manufacturer should be directly and strictly liable. Firestone did not design, manufacture, or sell the particular wheel in question. Firestone Steel Prods. Co. v. Barajas, 927 S.W.2d 608 (Tex. 1996).

      . Nelson v. International Paint Co., 734 F.2d 1084, 1088 (5th Cir.1984) (citing S. Blickman, Inc. v. Chilton, 114 S.W.2d 646, 649 (Tex.Civ. App.-Austin 1938, no writ)).

      . "This Court has adopted the products liability standard set forth in section 401A of the Restatement (Second) of Torts.” Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334-35 (Tex.1998), cert. denied, 526 U.S. 1040, 119 S.Ct. 1336 (1999).

      . See Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 432 (Tex. 1984); Bonniwell v. Beech Aircraft Corp., 663 S.W.2d 816, 819 (Tex. 1984).

      . Because our opinion is limited to a determination that Gladstrong USA is not entitled to summary judgment we make no determination regarding whether Gladstrong USA will be ordered to indemnify SSP and/or Metro. Any discussion of the guardian ad litem fee issue would be purely advisory. See Camareria v. Tex. Employment Comm'n, 754 S.W.2d 149, 151 (Tex.1988) ("It is fundamental that a court has no jurisdiction to render an advisory opinion on a controversy that is not yet ripe.”).

      . Butcher, Carter & Preston Co. v. Republic-Lagun CNC Corp., 01-00-00321-CV, 2001 WL 995370, 2001 Tex.App. LEXIS 6028 (Tex. App.-Houston [1st Dist.] 2001) (unpublished), also cited by appellants, involved efforts to collect on a sworn account.

      . SSP also cites to Luedtke v. BHP Petroleum (Americas) Inc., 07-97-0442-CV, 1999 WL 343427, 1999 Tex.App. LEXIS 2716 (Tex. App.-Amarillo 1999) (unpublished), which involved a complex network of foreign and domestic companies and subsidiaries, a merger and corporate restructuring. Luedtke, suing under an employment contract, asserted that BHP was liable either as his direct employer, or liable as the alter ego of or a participant in a single business enterprise with the entity that was his employer. Id. at ⅜1-*2. The court found summary judgment inappropriate because there remained a fact issue as to whether BHP was his direct employer. Id. at *14. El Puerto de Liverpool, S.A. de C.V., v. Servi Mundo Llantero, S.A. de C.V., 82 S.W.3d 622 (Tex.App.-Corpus Christi 2002, pet. dism’d w.o.j.), cited by Metro and SSP, focused on the alter ego theory. Id. at *2. Murphy Bros. Chevrolet Co. v. East Oakland Auto Auction, 437 S.W.2d 272, 275-76 (Tex. Civ.App.-El Paso 1969, writ ref’d n.r.e.) similarly deals with the theory of alter ego. See id.


source: Caselaw Access Project

author: VANMETER, Judge.

license: Public Domain

text:
    LKS PIZZA, INC., Appellant, v. COMMONWEALTH of Kentucky, by and on relation of R.B. RUDOLPH, Secretary, Finance and Administration Cabinet, Appellee.
    No. 2004-CA-001200-MR.
    Court of Appeals of Kentucky.
    July 15, 2005.
    Timothy J. Crocker, Mark A. Thurmond, Crocker & Wilkey, Attorneys, Franklin, KY, for Appellant.
    Stephen J. Crawford, Finance & Administration, Cabinet, Department of Revenue Frankfort, KY, for Appellee.
    Before KNOPF, TAYLOR, and VANMETER, Judges.
   OPINION

VANMETER, Judge.

Under KRS 139.670 and 139.680, sales tax liability is imposed upon a purchaser of assets of a business for any such taxes the seller has failed to remit to the Revenue Cabinet. We must decide whether such liability attaches in the event the assets are repossessed by a secured creditor, who then transfers the assets to a separate corporation which proceeds to operate a similar business. As we hold that it does not, we reverse the decision of the Franklin Circuit Court.

The facts of this case are relatively straightforward and are not disputed by the parties. PJDoughboy, Inc., a Kentucky corporation, operated a Papa John’s pizza franchise in Russellville. At the time the business started, its officers, Robert Jones and Cheryl Jones, individually executed a security agreement with Shane Harris in order to purchase equipment for use in the business. Harris retained a security interest in that equipment. In 2003, PJDoughboy was failing, and Harris exercised his right to repossess the equipment, which he then transferred to LKS Pizza, Inc., a Pennsylvania corporation. LKS then began operation of its own Papa John’s franchise at the same Russellville location.

In January 2004, the Kentucky Finance and Administration Cabinet filed a complaint in the Franklin Circuit Court alleging that LKS is the business successor to PJDoughboy. PJDoughboy’s delinquent sales tax liability is approximately $45,000, including tax, penalties and interest. Both parties filed motions for summary judgment. The trial court, relying upon Bank of Commerce v. Woods and In re Western Resources, Inc., held that “successor liability attaches to an entity that takes over a delinquent company, regardless of whether cash exchanged hands, if the entity continues to operate the business for any period of time.” Consequently, the trial court entered summary judgment in favor of the Finance Cabinet. This appeal followed.

The Finance Cabinet seeks to impose liability pursuant to KRS 139.670 and 139.680. KRS 139.670 provides:

If any retailer liable for any amount under this chapter sells out his business or stock of goods, or otherwise quits business, his successors or assigns shall withhold sufficient of the purchase price to cover such amount until the former owner produces a receipt from the cabinet showing that it has been paid or a certificate stating that no amount is due.

KRS 139.680(1) provides in pertinent part:

If the purchaser of a business or stock of goods fails to withhold the purchase price as required, he becomes personally hable for the payment of the amount required to be withheld by him to the extent of the purchase price, valued in money.

As an initial matter we note that the interpretation of a tax statute is a matter of law for the court to decide. And in general, the “tax statutes creating liability are to be strictly construed against the taxing authority,” and “all doubts and ambiguities resolved in favor of the taxpayer.”

Under the plain wording of the statute, the legislature clearly sought to impose successor liability on a successor who buys into a business. The theory is that such a successor, who pays a consideration for the taxpayer’s business or stock in trade, is in a better position than the Finance Cabinet to make sure that any delinquent sales taxes are paid.

Our review of case law from other jurisdictions indicates that if a secured creditor acquires assets as a result of a foreclosure in which no consideration changes hands, that creditor does not thereby become liable for the debtor’s unpaid sales taxes. As stated by the Arizona Supreme Court:

The key to determining whether a “purchase” has occurred for the purposes of determining successor liability, therefore, is determined by an analysis of the underlying transaction. A person acquiring property cannot withhold “purchase money” unless the transaction generates purchase consideration such that the “purchaser” is in a position to account for his predecessor’s tax liability. See, e.g., Knudsen Dairy, 12 Cal. App.3d at 54, 90 CaLRptr. at 539 (“successor liability cannot be imposed when the duty to withhold ... cannot possibly be performed by the successor”).
In the instant case, the Debtors exercised their statutory rights under their landlord’s hen and repossessed the business premises after the Summerlets defaulted on the lease. A repossession of a leasehold is not a “purchase”; the Debtors merely exercised their rights to possession of the business premises upon default. No consideration of any kind was generated by this transaction, and thus the Debtors could not have withheld the tax due. Therefore, no successor liability attached. The Debtors were similarly entitled to take possession of the fixtures, equipment and inventory pursuant to their rights under the security agreement. Again, no successor liability attached because no purchase consideration was generated.
The fact that the repossessed property was subsequently sold to satisfy the lien is immaterial to this analysis. Successor liability is measured by the mechanism used to acquire the property, not by the fact that it is subsequently sold. Clearly, a cash transaction results in successor liability because the purchaser can withhold from the purchase price the amount of tax due. Similarly, in the case of a promissory note or debt cancellation, the amount of the note or debt can be adjusted to take into account the amount of tax liability. But where, as here, there is a repossession of a business or enforcement of creditor’s rights under a security agreement, and nothing more, there is no source from which to withhold purchase money. See State v. Standard Oil Co., 39 Ohio St.2d 41, 45-46, 313 N.E.2d 838, 841 (1974) (foreclosure of defaulting debtor’s property by a creditor holding a perfected security interest in such property was not a “sale” within the meaning of successor liability statute); but see Woods, 585 S.W.2d at 580-82 (bank held to be successor when it chose to purchase the store instead of foreclosing on its security interest).

The cases cited by the Finance Cabinet do not mandate a different result. Most if not all of those cases involved either some consideration, ie., a fund, from which the delinquent taxes could have been withheld, or the structure of a purchase/sale which served some purpose beneficial to the creditor, or a more broadly written successor liability statute.

The Finance Cabinet’s reliance on In re Western Resources, Inc. is similarly misplaced. As an initial matter, we note that we are not bound by a federal court’s interpretation of state law. However, we believe the case is factually distinguishable from the present case. The facts of Wesi-em Resources were that an unsecured creditor, apparently under common management with the delinquent taxpayer, agreed to purchase certain of the taxpayer’s assets, equipment, and vehicles in exchange for a reduction in debt. In return, the creditor leased the assets back to the taxpayer. The bankruptcy court, relying upon an administrative regulation which has since been repealed, held that “a purchase price was paid in money by the forgiveness of a monetary debt and by the assumption of liabilities.”

In the instant case, Harris repossessed the equipment, as was permitted under the security agreement. The transaction was not structured as a purchase, as was the transaction in Western Resources. We find it curious that the Finance Cabinet concedes that “Mr. Russell [sic] (LKS) could have repossessed and removed his equipment without successor liability attaching ...,” but nevertheless asserts that LKS, in acquiring the equipment from Harris, thereby incurred successor liability. The Finance Cabinet argues that “this court must decide ... whether Harris can take the entire assets of PJDoughboy and run the pizza business as his own without also addressing the sales tax liability of its predecessor.” The record, however, does not support any finding that LKS was the alter ego of Harris, or that LKS assumed the lease obligations or the franchise agreement of PJDoughboy.

The order of the Franklin Circuit Court is reversed, and this matter is remanded to that court for proceedings consistent with this opinion.

ALL CONCUR.

      . 585 S.W.2d 577 (Tenn.1979).

      . 114 B.R. 621 (Bankr.S.D.Ind.1990).

      . Laurel Run Resources, Inc. v. Com. ex rel. Calvert, 853 S.W.2d 905, 906 (Ky.App.1992); Gillis v. Preston, 746 S.W.2d 77, 79 (Ky.App. 1987).

      . Popplewell’s Alligator Dock No. 1, Inc. v. Revenue Cabinet, 133 S.W.3d 456, 463 (Ky. 2004); Stoner Creek Stud, Inc. v. Revenue Cabinet, 746 S.W.2d 73, 75 (Ky.App. 1987).

      . Stoner Creek, 746 S.W.2d at 75.

      . Revenue Cabinet v. Triple R Food A Rama, 890 S.W.2d 638, 640 (Ky.App. 1994).

      . See, e.g., Northern Lights Inn v. Employment Sec. Div., 695 P.2d 723, 725 (Alaska 1985) (secured creditor acquiring hotel at a foreclosure sale created no fund from which to pay unpaid unemployment premiums); In re McKeever, 169 Ariz. 312, 314-15, 819 P.2d 482, 484-85 (1991) (lessor’s/secured creditor’s reentry to leased premises and operation of business did not entail a purchase); Mountains Shadow Inn v. Colorado Dep't of Labor, 672 P.2d 522, 524 (Colo. 1983) (lessor's reentry of restaurant premises and operation of business until a new lessee could be obtained did not involve a purchase); Lloyds Bank PLC v. State, 109 Nev. 1111, 1116, 864 P.2d 298, 301 (1993) (creditor gaining ownership of secured property by foreclosure did not generate funds from which to withhold delinquent unemployment premiums; transaction was not a sale as contemplated by statute); State v. Standard Oil Co., 39 Ohio St.2d 41, 313 N.E.2d 838 (1974) (secured creditor assuming ownership pursuant to security agreement did not result in a purchase to which successor liability could attach).

      . In re McKeever, 169 Ariz. at 314-15, 819 P.2d at 484-85.

      . Bates v. Director of Revenue, 691 S.W.2d 273 (Mo.1985) (successor purchased motel property directly from delinquent taxpayer).

      . Knudsen Dairy Products Co. v. State Bd. of Equalization, 12 Cal.App.3d 47, 90 Cal.Rptr. 533 (1970) (secured creditor became sole shareholder of delinquent taxpayer and structured transfer of taxpayer's assets to another subsidiary corporation in exchange for a credit in the amount owed to creditor equal to the value of the assets transferred, and subsidiary corporation thereafter operated the business); Bank of Commerce v. Woods, 585 S.W.2d 577 (Tenn.1979) (secured creditor "purchased” equity of delinquent taxpayer in food store and operated business in order to avoid foreclosure).

      . New Jersey Hotel Holdings, Inc. v. Director, Division of Taxation, 15 N.J.Tax 428 (1996) (NJ.S.A.54:32B-22(c) imposes successor liability upon “any purchaser, transferee, or as-signee” of a delinquent taxpayer's assets).

      . 114 B.R. 621 (Bankr.S.D.Ind.1990).

      . Embs v. Pepsi-Cola Bottling Co., 528 S.W.2d 703 (Ky.1975); Bruck v. Thompson, 131 S.W.3d 764, 766 (Ky.App.2004).

      . 103 KAR 31:150(1). The regulation stated that the purchase price could include "money or property or providing for the assumption of liabilities.” That same regulation, as noted by the court, provided that "transfers such as 'assignments for the benefits of creditors, foreclosures of mortgages ... ’ do not trigger the requirement that sufficient amounts be withheld from the purchase price to cover tax liabilities of the transferrer.” 114 B.R. at 625.

      . Id. at 625.

      . See also KRS 355.9-609 (secured party’s right to take possession of collateral after default); KRS 355.9-620 (secured party’s right to accept collateral in full or partial satisfaction of obligation).


author: SCHRODER, Judge.

text:
    Greg FARMER, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    No. 2004-CA-000865-MR.
    Court of Appeals of Kentucky.
    July 15, 2005.

      Justin Thomas Genco, Stanford, KY, for appellant.
    Gregory D. Stumbo, Attorney General of Kentucky, Clint Evans Watson, Assistant Attorney General, Frankfort, KY, for ap-pellee.
    Before BARBER, KNOPF and SCHRODER, Judges.
   OPINION

SCHRODER, Judge.

This is an appeal from a judgment pursuant to a conditional guilty plea to two counts of second-degree assault stemming from an automobile collision. Appellant argues that the toxicology results of a blood/urine test should have been suppressed because he only gave his consent to have his blood tested for alcohol, not controlled substances, pursuant to a consent form presented to him at the hospital. We adjudge that appellant’s initial general consent to police was not limited by the consent form subsequently submitted to appellant by the hospital. Accordingly, the trial court properly found that appellant consented to the drug testing of his blood and urine. Thus, we affirm.

On October 6, 2002, Officer Kendra Wilson of the Pulaski County Sheriffs Department responded to a report of a motor vehicle accident. Upon arriving at the scene, appellant, Greg Farmer, was sitting alongside the road. Farmer had been driving and was the sole occupant of one of the cars, although he did not own the car. Angela and Daniel Baker were in the other car involved in the accident, and both were injured in the collision. Officer Wilson found a red straw in the car Farmer had been driving, which Wilson suspected had been used for ingesting a controlled substance. Indeed, the straw later tested positive for traces of oxycodone and hydro-codone. Upon discovering the straw, Officer Wilson asked Farmer if he would consent to tests of his blood and urine. Farmer stated that he would agree to the tests.

Thereafter, Officer Wilson gave a blood and urine test kit to an emergency medical worker at the scene to be administered by hospital emergency personnel at the hospital where Farmer was to be taken. Officer Wilson testified that she gave the kit to the emergency medical worker because Wilson had to stay at the scene of the collision. Farmer was thereafter transported by ambulance to Lake Cumberland Regional Hospital (“LCRH”). According to Officer Wilson, Farmer was not under arrest or in police custody at the scene of the accident or at the hospital. Once at the hospital, Jennifer Latham, a registered nurse who worked in the emergency room, presented Farmer with a blood-alcohol test consent form. The form presented to Farmer was a standard consent form that the hospital used to check a patient’s blood-alcohol content when ordered by a physician or police. According to Latham, it is the only consent form used by the hospital to test a patient’s blood or urine for alcohol or drugs. The form was entitled “POLICY FOR CONSENT OF BLOOD ALCOHOL”, and made no mention of testing the patient’s urine or testing the patient’s blood for anything but alcohol. When asked by Latham if he would agree to the information contained in the form, Farmer verbally responded that he would. Latham then signed Farmer’s name to the form. Thereupon, Latham took a blood sample from Farmer and a urine sample from his catheter bag.

Officer Wilson picked up Farmer’s blood and urine samples at the hospital that same day and mailed the samples to the Kentucky State Police (“KSP”) crime lab. Officer Wilson never spoke with Farmer at the hospital. The results of the KSP tests revealed that Farmer had cannabinoid metabolites (marijuana) in his urine and Ci-talopram, a mood altering drug, in his blood and urine. No alcohol, oxycodone or hydrocodone were found.

As a result of the motor vehicle collision, Farmer was indicted on March 26, 2003 for: operating a motor vehicle under the influence of alcohol or drugs, second offense (“DUI II”); operating a motor vehicle while license suspended or revoked for DUI, first offense; failure to maintain liability insurance on a motor vehicle; and on two counts of first-degree assault relative to the injuries sustained by Angela and Daniel Baker. The court subsequently dismissed the charges for operating a motor vehicle on a suspended or revoked license and failure to maintain liability insurance on a motor vehicle.

On May 28, 2003, Farmer filed a motion to suppress the results of the toxicology tests on his blood and urine. After a full suppression hearing on the motion, the court denied the motion on February 11, 2004.

Pursuant to a plea agreement, Farmer entered a conditional Alford plea to two counts of second-degree assault in exchange for the Commonwealth’s agreement to amend the first-degree assault charges to second-degree assault, to dismiss the remaining charge of DUI II, and to recommend a concurrent sentence of ten years’ imprisonment on each assault charge. On April 22, 2004, Farmer was sentenced according to the Commonwealth’s recommendation to a total of ten years in prison. This appeal by Farmer followed.

Farmer’s first argument is that the Commonwealth exceeded the scope of his consent to search by testing his blood and urine for controlled substances. Farmer contends that since the consent form at the hospital was limited to blood-alcohol testing, the Commonwealth could not lawfully test his blood for controlled substances or test his urine at all.

The taking of a blood or urine sample is considered a search of the person and subject to Fourth Amendment and state constitutional limitations on searches. Schmerber v. California, 384 U.S. 757, 86 S.Ct. 1826, 16 L.Ed.2d 908 (1966). Consent to search is an exception to the warrant requirement. Commonwealth v. Erickson, 132 S.W.3d 884 (Ky.App.2004); Schneckloth v. Bustamonte, 412 U.S. 218, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973). The Commonwealth has the burden of showing by a preponderance of the evidence, through clear and positive testimony, that valid consent to search was obtained. U.S. v. Riascos-Suarez, 73 F.3d 616 (6th Cir. 1996), cert. denied, 519 U.S. 848, 117 S.Ct. 136, 136 L.Ed.2d 84 (1996). Even when a search is authorized by consent, the scope of the search is limited by the terms of its authorization. Shamaeizadeh v. Cunigan, 338 F.3d 535 (6th Cir.2003), cert. denied, 541 U.S. 1041, 124 S.Ct. 2159, 158 L.Ed.2d 729 (2004). “The standard for measuring the scope of a suspect’s consent under the Fourth Amendment is that of ‘objective’ reasonableness — what would the typical reasonable person have understood by the exchange between the officer and the suspect?” Florida v. Jimeno, 500 U.S. 248, 251, 111 S.Ct. 1801, 1804, 114 L.Ed.2d 297, 302 (1991) (quoting Illinois v. Rodriguez, 497 U.S. 177, 183-189, 110 S.Ct. 2793, 2798-2802, 111 L.Ed.2d 148 (1990)).

In the instant case, according to the testimony of Officer Wilson, Farmer verbally gave his general consent to tests on his blood and urine. Farmer did not indicate any limitation on the type of tests to be run when he gave his verbal consent to Wilson. In viewing the language of the consent form subsequently signed by Farmer at the hospital, it is clear that the form was not a document submitted by police, but rather by the hospital for the hospital’s protection. The form makes reference to “protect[ing] LCRH employees from charges of assault and battery,” and disclaims liability of the hospital and its employees “arising out of the taking of the blood sample.” The form was presented to Farmer by Jennifer Latham, a nurse in the emergency room, and Officer Wilson, who picked the samples for the police, had no contact with Farmer at the hospital.

The Court of Appeals of Georgia had a similar issue before it in State v. Lewis, 233 Ga.App. 390, 504 S.E.2d 242 (1998), wherein the DUI suspect gave her consent to police at the scene of the accident, pursuant to that state’s implied consent notice, to tests of her blood and urine for alcohol or drugs. Later, when the suspect was taken to a local hospital for the tests, she signed a form required by the hospital consenting to having a blood sample taken for alcohol testing. As in the present case, the hospital form did not mention testing for controlled substances. Pursuant to tests performed by the state’s crime lab, the suspect’s blood and urine tested positive for marijuana. Like the instant case, the suspect argued that the results of the drug tests on her blood and urine should be suppressed because the consent form she signed at the hospital only gave consent for blood-alcohol testing. The Court ruled that the lower court erred in granting the suppression motion, reasoning:

Whatever the form prepared by the hospital may have said or led Lewis to believe, it had no bearing on the State’s right to test Lewis’ blood and urine for alcohol or drugs pursuant to the consent she gave after receiving the required implied consent notice.... Nothing on the form prepared by the hospital, including the statement signed by the officer, could be construed as action taken by the State in violation of the statutory requirements of implied consent.

Id. at 244 (citations omitted).

A trial court’s findings of fact pursuant to a suppression motion will not be overturned unless they are clearly erroneous i.e. not supported by substantial evidence. RCr 9.78; Commonwealth v. Banks, 68 S.W.3d 347 (Ky.2001); Diehl v. Commonwealth, 673 S.W.2d 711 (Ky.1984). Although Farmer was not under arrest at the time of consent and thus Kentucky’s implied consent provisions had no bearing in the present case, Farmer did give police his express general consent to tests of his blood and urine. In our view, the subsequent consent form submitted by the hospital did not operate to withdraw his earlier consent to police or limit his consent to just blood-alcohol testing. Accordingly, the trial court’s finding that Farmer consented to the drug testing of his blood and urine was not clearly erroneous.

Farmer’s remaining argument is that the trial court erred in not addressing Farmer’s motion to exclude the urine test results based upon their unfairly prejudicial effect. Farmer argued at the suppression hearing that the results of his urine test, which revealed the presence of marijuana, were not sufficiently probative so as to outweigh the prejudicial impact of such evidence. Hence, under KRE 403, those test results should have been excluded. The trial court failed to address this argument in its opinion and order on the suppression motion. However, Farmer did not bring this failure to the attention of the trial court as required by CR 52.04. See RCr 13.04. Accordingly, the issue was waived.

For the reasons stated above, the judgment of the Pulaski Circuit Court is affirmed.

ALL CONCUR.


author: BARBER, Judge.

text:
    Kevin Michael POE, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    No. 2004-CA-000747-DG.
    Court of Appeals of Kentucky.
    July 22, 2005.

      Kenneth R. Haggard, Hopkinsville, KY, for Appellant.
    Gregory D. Stumbo, Attorney General of Kentucky, Todd D. Ferguson, Assistant Attorney General, Frankfort, KY, for Ap-pellee.
    Before BARBER and SCHRODER, Judges; HUDDLESTON, Senior Judge.

      . Senior Judge Joseph R. Huddleston sitting as Special Judge by assignment of the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution and KRS 21.580.

   OPINION

BARBER, Judge.

Kevin Michael Poe (Poe) entered a conditional guilty plea on September 25, 2003 to the offenses of driving under the influence, first offense, and possession of marijuana after the district court denied his motion to suppress evidence seized as a result of, what Poe argues, was an illegal stop. The circuit court affirmed the district court’s ruling and Poe’s request for discretionary review by this Court was granted on June 14, 2004. We reverse.

On December 21, 2002 an officer with the Hopkinsville Police Department observed Poe driving up and down the same streets around 1:30 a.m. The citation notes a “courtesy stop was made to possibly offer directions.” The officer effected the stop by pulling behind Poe and activating his emergency lights. Once the stop was made the officer noticed Poe had bloodshot eyes, a carefree attitude, and was not wearing a seatbelt. Poe admitted upon questioning that he had been smoking marijuana. Poe was arrested and charged with operating a motor vehicle while under the influence of drugs, no insurance, possession of marijuana, and possession of drug paraphernalia, first offense.

Poe filed a motion to suppress all evidence based on the allegation that the officer did not have a reasonable and artic-ulable suspicion upon which to believe any criminal activity was afoot, thus, the stop did not meet the constitutional standards required by Delaware v. Prouse, 440 U.S. 648, 99 S.Ct. 1391, 59 L.Ed.2d 660 (1979).

On January 23, 2003 the district court held a suppression hearing on Poe’s motion. At the hearing the officer testified regarding the stop he made of Poe as follows:

Haggard: [Poe’s attorney] The basis for pulling him [Poe] over was that as a courtesy?
[Officer] Marszalek: Yes, sir.
Haggard: Okay. There was no criminal activity that you saw being committed was there?
Marszalek: No, sir.
Haggard: You basically just assumed he might be lost and so you pulled him over.
Marszalek: Correct.
Haggard: As we stand here, you can’t articulate any criminal activity that you thought was being committed?
Marszalek: No, sir.
Adams: [Prosecutor] Is there or was there any other basis for this stop?
Marszalek: Other than the courtesy stop I figured the subject was lost. He was observed driving numerous times around Mechanic’s Street, up and down Howell, Hayes, and Youn-glove. It is a very high drug activity area. I noticed Mr. Poe driving, noticed him driving without a seatbelt. Each time I passed him by Mr. Poe had pretty much been smiling and then I got him stopped. I didn’t know if something was wrong or he was lost or he was looking for something. I made the stop to offer assistance....

Officer Marszalek acknowledged that he activated his emergency lights to pull Poe over and he admitted he did not cite Poe for failing to wear a seatbelt although he gave him a verbal warning. In his testimony the officer insisted he had observed Poe’s failure to wear a seatbelt prior to pulling him over but admitted he did not stop Poe for this reason.

The district court made the following factual finding, “I think what we’ve got here is the intent for him to stop was not based upon criminal activity. It was, as you indicated, a courtesy stop.” The district court then ruled that once Poe was stopped Officer Marszalek could, upon the observation of circumstances leading to a reasonable belief of criminal activity, investigate further and take appropriate measures. Thus, Poe’s motion to suppress was denied. Poe subsequently entered a conditional guilty plea as noted above and appealed the district court’s ruling on the motion to suppress to circuit court.

The circuit court affirmed the district court’s ruling expressly relying on United States v. Baxter, 361 F.2d 116 (6th Cir. 1966) cert. den. Baxter v. U.S., 385 U.S. 834, 87 S.Ct. 79, 17 L.Ed.2d 69 (1966). In Baxter an officer stopped a vehicle with a trailer that appeared to be having difficulty. Once stopped, Baxter exited the vehicle, told the officer he had a flat tire, and requested the officer’s assistance. When the officer approached the side of Baxter’s trailer he noticed a strong smell of whisky mash. Id. at 117. The Sixth Circuit Court of Appeals held the subsequent search of the trailer and arrest of Baxter to be constitutionally sound. Id. at 120.

Poe’s petition for discretionary review was granted by this Court and in his argument for reversal of the lower courts’ decisions Poe continues to assert there was no reasonable and articulable suspicion of criminal activity, thus, no basis for him to be stopped.

The Commonwealth does not dispute Poe’s argument; in fact, it admits in its response to Poe’s petition for discretionary review that, “there is no question of fact or law surrounding the lack of criminal activity as a basis for the stop in this case.” Instead, the Commonwealth relies on the “community caretaking function” of police officers endorsed by Cady v. Dombrowski, 413 U.S. 433, 93 S.Ct. 2523, 37 L.Ed.2d 706 (1973), to justify the stop of Poe in this case.

The standard of review on a motion to suppress is a two step process that requires an appellate court to review the trial court’s findings of fact under a clearly erroneous standard and its conclusions of law de novo. Welch v. Commonwealth, 149 S.W.3d 407, 409 (Ky.2004).

The Commonwealth admits that the stop of Poe was not based on any reasonable and articulable suspicion of criminal activity and the circuit court’s ruling also recognizes that the stop of Poe was not based on this principle, thus, it cannot be justified pursuant to the doctrines expressed in Delaware v. Prouse, 440 U.S. 648, 663, 99 S.Ct. 1391, 1401, 59 L.Ed.2d 660 (1979) and Terry v. Ohio, 392 U.S. 1, 21-22, 88 S.Ct. 1868, 1880, 20 L.Ed.2d 889 (1968). See also, Simpson v. Commonwealth, 834 S.W.2d 686, 687 (Ky.App.1992). Essentially the Commonwealth is admitting the stop of Poe was illegal unless the community caretaking function exception applies.

Thus, we are presented only with the narrow question of whether Officer Marsz-alek’s stop of Poe qualifies under the community caretaking function.

The community caretaking function was first articulated by the United States Supreme Court in Cady v. Dombrowski, 413 U.S. 433, 93 S.Ct. 2523, 37 L.Ed.2d 706 (1973). The Court explained the idea in the context of a case where the police had searched a vehicle without a warrant that had been removed from an accident scene. The search occurred later in time from the accident and was made to locate the driver’s, who was a Chicago police officer, service revolver. Id. 413 U.S. at 437, 93 S.Ct. at 2526. The Court found the search not to violate Constitutional principles stating:

Because of the extensive regulation of motor vehicles and traffic, and also because of the frequency with which a vehicle can become disabled or involved in an accident on public highways, the extent of police-citizen contact involving automobiles will be substantially greater than police-citizen contact in a home or office. Some such contacts will occur because the officer may believe the operator has violated a criminal statute, but many more will not be of that nature. Local police officers, unlike federal officers, frequently investigate vehicle accidents in which there is no claim of criminal liability and engage in what, for want of a better term, may be described as community caretaking functions, totally divorced from the detection, investigation, or acquisition of evidence relating to the violation of a criminal statute.

Id. 413 U.S. at 441, 93 S.Ct. at 2528.

Since Cady v. Dombrowski supra was decided, courts across the country have considered the community caretaking function and whether it applies in a variety of situations. Most jurisdictions have adopted the doctrine in some form although a few have declined to consider it where the facts presented did not rise to a level sufficient to show that a vehicle’s operator required police assistance. Rowe v. State, 363 Md. 424, 445, 769 A.2d 879, 891 (2001); Barrett v. Commonwealth, 250 Ya. 243, 248, 462 S.E.2d 109, 112 (1995).

The Rowe and Barrett courts viewed the doctrine applied in the context of one needing police assistance as an extension of the United States Supreme Court’s holdings since Cady and its progeny only considered the community caretaking function of police officers where an inventory search of property properly in custody was conducted without a warrant. Rowe, supra 363 Md. at 444, 769 A.2d at 890-891 (quoting Barrett, supra 250 Va. at 246-248, 462 S.E.2d at 111-112).

Most other courts that have had occasion to determine whether the community caretaking function of police officers applies in a given situation have required the officer’s stop to be based on specific and articulable facts that lead to a reasonable conclusion that the individual requires assistance or is necessary for the public’s safety. State v. Marcello, 157 Vt. 657, 658, 599 A.2d 357, 358 (1991). See also, Crauthers v. State, 727 P.2d 9, 11 (Alaska App. 1986)(observation of facts and circumstances that lead to reasonable conclusion driver is requesting assistance); State v. Harrison, 111 Ariz. 508, 509, 533 P.2d 1143, 1145 (stopped because tire “bouncing” off the road); State v. Clayton, 113 Idaho 817, 818, 748 P.2d 401, 402 (1988)(approached because vehicle in parking lot with engine and lights on in the early morning while operator’s head was slumped forward); State v. Moore, 609 N.W.2d 502, 503 (Iowa 2000)(stopped by Park Ranger to tell driver to slow down in park because of number of people in proximity to road at the time); State v. Pinkham, 565 A.2d 318, 319 (Maine 1989)(safety reasons alone may be sufficient to justify stop if based on specific articulable facts); Commonwealth v. Evans, 436 Mass. 369, 373, 764 N.E.2d 841, 844 (2002)(approaching vehicle in breakdown lane to check on status of vehicle and occupants permissible under community caretaking function).

There have been no published cases in Kentucky considering the application of the community caretaking function to a stop made by a police officer. Cady v. Dombrowski, supra has only been cited and relied on twice: once in City of Danville v. Dawson, 528 S.W.2d 687 (Ky.1975) which has since been reversed by Estep v. Commonwealth, 663 S.W.2d 213 (Ky.1983). And the other Kentucky case citing to Cady v. Dombrowski, supra is Blankenship v. Commonwealth, 740 S.W.2d 164 (Ky.App.1987). Blankenship held that an officer’s search of a vehicle of a person who had been shot and was unconscious in order to seek his identity was proper. Id. at 166. In the process the officer found incriminating evidence in plain view — the Court held the evidence admissible. Id.

The circumstances in these cases are dissimilar from the facts here. In Poe’s case the issue is not whether an inventory search meets the constitutional standard, but whether the stop itself qualifies under the community caretaking function.

All courts that have considered the community caretaking function have required, at a minimum, that the officer’s actions must be measured by a standard of reasonableness. One court described this determination as “balancing the public need and interest furthered by the police conduct against the degree and nature of the intrusion upon the privacy of the citizen.” State v. Ellenbecker, 159 Wis.2d 91, 96, 464 N.W.2d 427, 429 (Wis.App.1990), rev. den., 468 N.W.2d 28 (Wis.1991).

Ellenbecker applied this test in the context of a police officer requesting the license of an operator of a disabled vehicle. Id. 159 Wis.2d at 96-97, 464 N.W.2d at 429. But its principle is equally applicable to Poe’s case because when Officer Marszalek stopped Poe using his emergency lights he effectively seized him. That is, any reasonable person in Poe’s situation would not have felt free to walk, or drive, away. Terry v. Ohio, supra 392 U.S. at 16, 88 S.Ct. at 1877. See also, State v. Jestice, 861 A.2d 1060, 1062 (Vt.2004)(stop is a shorthand way of referring to a seizure).

The question is was Officer Marsz-alek’s stop of Poe reasonable in the circumstances. We hold it was not. The public need in this case is slight. People commonly become lost, if in fact Officer Marszalek’s assumption about Poe’s driving was correct. Police officers do not normally pull someone over because they believe the operator of the vehicle needs directions. The intrusion on the privacy of the citizen, however, is great. The ordinary citizen would not expect a police officer to activate his emergency lights and effect a stop with which the citizen must comply without the stop being supported by some sort of traffic violation or criminal activity. Poe, of course, was free to stop the officer and ask directions. If he had initiated the stop, we would have a different situation.

As others have noted, for the community caretaking function to apply there must be some specific and articula-ble facts that would lead the officer to reasonably believe the citizen is in need of assistance. Jestice, supra 861 A.2d at 1064. An officer’s practice cannot provide reasonable grounds. Id. In this respect we agree with the observation that:

An officer’s subjective explanation for stopping or detaining a driver does not control Fourth Amendment analysis. Courts are required to “make an objective assessment of the officer’s actions” when determining if a stop was reasonable.

State v. Rinehart, 617 N.W.2d 842, 845 (S.D.2000)(Sabers, J. dissenting)(quoting United States v. Cummins, 920 F.2d 498, 501 (8th Cir.1990)(citing Scott v. United States, 436 U.S. 128, 136, 98 S.Ct. 1717, 1723, 56 L.Ed.2d 168,177 (1978))).

Such an objective assessment must also be applied in the context of an argument for the community caretaking function, otherwise, the protections afforded by the Fourth Amendment would quickly be eroded. Court approval of any reason related to “public need” for stopping and detaining a citizen based on the subjective beliefs of police officers is constitutionally insufficient.

In this case the district court found as a fact that Poe was stopped as a courtesy. That is, to possibly offer directions. After reviewing the testimony and arguments of the suppression hearing it cannot be held that this finding is clearly erroneous. Officer Marszalek himself stated he stopped Poe because he thought he might be lost.

But the legal conclusion drawn by the district court and upheld by the circuit court cannot stand. Officer Marszalek’s belief that Poe may need directions is not a valid basis to stop him in these circumstances. Officer Marszalek observed no traffic violations, no criminal activity, and no evidence such as a flat tire, flashing lights, jumper cables, a raised hood or any other indication that Poe required assistance. The community caretaking function does not provide justification for the stop in this case. Whether it would provide justification in other circumstances we leave for another day.

The decision of the circuit court is reversed and the case is remanded for proceedings consistent with this opinion.

ALL CONCUR.

      . The fact that Officer Marszalek also testified Poe was not wearing his seatbelt cannot provide an independent grounds to support the stop in this case because Officer Marszalek admitted he did not stop Poe for this reason nor write a citation for the violation. Further, the district court found as a fact that the stop was made as a courtesy and the Commonwealth asserts the justification for the stop is based on community caretaking functions, not on law enforcement.

      . United States v. Baxter, 361 F.2d 116 (6th Cir.1966) cert. den. Baxter v. U.S., 385 U.S. 834, 87 S.Ct. 79, 17 L.Ed.2d 69 (1966), relied on by the circuit court here, is simply not applicable. Baxter concerned the constitutionality of a search, not the legality of a stop.