UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 95-20298
Summary Calendar
ROBERTO MARINELLI PEREZ and
JOAQUINA MARIA SALCEDO P. DE MARINELLI,
Plaintiffs-Appellants,
VERSUS
PAN AMERICAN LIFE INSURANCE COMPANY and
SEGUROS PANAMERICANA, S.A.,
Defendants-Appellees.
Appeal from the United States District Court
For the Southern District of Texas
(CA H 94 3096)
(October 20, 1995)
Before GARWOOD, WIENER and PARKER, Circuit Judges.
PER CURIAM:*
Plaintiffs-appellants Roberto Marinelli Perez and Joaquina
Maria Salcedo P. De Marinelli ("Marinelli") brought a diversity
action against defendants-appellees Pan American Life Insurance
*
Local Rule 47.5 provides: "The publication of opinions that
have no precedential value and merely decide particular cases on
the basis of well-settled principles of law imposes needless
expense on the public and burdens on the legal profession."
Pursuant to that Rule, the Court has determined that this opinion
should not be published.
Company ("Pan American") and Seguros Panamericana, S.A. ("Seguros")
in the United States District Court for the Southern District of
Texas alleging violations of the Texas Deceptive Trade Practices
Act and the Texas Insurance Code, breach of the duty of good faith
and fair dealing, breach of contract, and intentional infliction of
emotional distress. The district court dismissed the claims
against Pan American for failure to state a claim. The district
court also dismissed the claims against Seguros on the basis of
improper venue. Seguros, although named in the original complaint,
was never properly served, did not enter an appearance in the
district court and is not a party to the appeal. Marinelli
nevertheless appeals the district court's rulings as to both
defendants.
We affirm in part, reverse in part and remand for further
proceedings.
FACTS
Roberto Marinelli Perez, a Guatemalan citizen and resident,
purchased a medical insurance policy from Seguros in June 1992.
Seguros, a subsidiary of Pan American, is a Guatemalan corporation
licensed to sell insurance in Guatemala. Marinelli purchased the
policy based, in part, on the representation that Seguros would
reimburse expenses incurred for medical treatments provided
anywhere in the world. Marinelli claims that Seguros specifically
represented that he and his family could come to the Houston, Texas
Medical Center for treatment if the need arose. All premiums due
under the policy were paid.
On May 3, 1993, Marinelli's son Andres was born and Marinelli
submitted an application to add him to the policy, which was
initially approved. On July 7, 1993, Andres was diagnosed with a
congenital liver dysfunction and began receiving medical treatment
in Houston, Texas, the cost of which eventually exceeded $300,000.
Andres' Texas medical treatments were pre-approved by Seguros.
Later, Seguros denied Marinelli's claim for benefits, stating that
Andres' treatment was not covered because it fell within the
policy's pre-existing condition exclusion.
On July 4, 1994, Seguros sued Marinelli in Guatemala on a
declaratory judgment action alleging fraud in the procurement of
the policy endorsement for Andres, asserting that Marinelli
intentionally omitted from the insurance application certain
information regarding his newborn child's congenital condition.
DISMISSAL OF PAN AMERICAN
a. Standard of review
In reviewing the district court's judgment of dismissal for
failure to state a claim against Pan American upon which relief may
be granted, we must determine whether there is any set of facts on
which Marinelli would be entitled to recover that could be proven
consistent with the allegations contained in the complaint. Baton
Rouge Bldg. & Constr. Trades Council, AFL-CIO v. Jacobs
Constructors, Inc., 804 F.2d 879, 881 (5th Cir. 1986).
b. Was Pan American an alter ego of Seguros?
Pan American did not have a contract of insurance with
Marinelli. The insurance contract was entered into by Marinelli
and Seguros, a foreign corporation and a subsidiary of Pan
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American. The alter ego doctrine is a narrow exception to the
general rule which forbids disregarding the separate corporate
existence of defendants. First Nat'l Bank v. Gamble, 132 S.W.2d
100, 103 (Tex. 1939). Alter ego is not a separate cause of action,
but rather a means of expanding the potential source of recovery.
See Farr v. Sun World Sav. Ass'n, 810 S.W.2d 294, 297 (Tex. App.--
El Paso 1991, no writ). Only in exceptional circumstances should
a court disregard the corporate identity, and then only to prevent
an inequitable result. Torregrossa v. Szelc, 603 S.W.2d 803, 804
(Tex. 1980).
In deciding whether a parent corporation can be held liable
for the acts of its subsidiary, the court must determine if the
parent corporation participated in wrongful conduct. Marinelli
must allege that Pan American committed a legally sufficient wrong
to avoid dismissal on its alter ego theory. See Kern v. Gleason,
840 S.W.2d 730, 736 (Tex.App.--Amarillo 1992, no writ). The
complaint essentially alleges that Pan American used its corporate
structure to evade legal responsibility under Texas law.
Plaintiffs will further show that Defendant, Pan-
American Life Insurance Company is liable for the torts
of Seguros [] for the reason that said corporation serves
merely as a tool or conduit by which defendant does
business in Texas while insulating itself from risk and
possible liability and that Seguros [] is a mere cloak to
conceal wrongs and injustice. Furthermore, Plaintiffs
will show that Defendant seeks to circumvent application
of those statutes which this Complaint specifically
asserts violations of[.]
Assuming that Guatemalan law is more favorable to an insurance
company than Texas law, and that Pan American sought to structure
its relationship with its Guatemalan subsidiary so that the
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subsidiary is governed by Guatemalan law, we find no authority for
holding that such conduct is wrongful in any way that gives rise to
liability under the alter ego theory.
Further, Marinelli judicially admitted that Seguros is
adequately capitalized and able to satisfy any potential judgment
in this action. Even though a parent and its subsidiary may have
some or all of the same directors, file consolidated income tax
returns and conduct inter-corporate business, absent an allegation
or evidence that the subsidiary is undercapitalized, incapable of
paying the judgment or used its corporate structure to achieve an
inequitable result, the parent is entitled to a judgment as a
matter of law. Lucas v. Texas Indus., Inc., 696 S.W.2d 372, 376
(Tex. 1984).
For the foregoing reasons, we affirm the district court's
dismissal of Pan American.
DISMISSAL OF SEGUROS
Pan American moved to dismiss the case for improper venue
pursuant to Federal Rule of Civil Procedure 12(b)(3). Once Pan
American raised its venue objection, Marinelli was required to come
forward with evidence showing venue is proper in the Southern
District of Texas. Advanced Dynamics Corp. v. Mitech Corp., 729 F.
Supp. 519 (N.D. Tex. 1990).
The district court's memorandum opinion states that it is
undisputed that Seguros does no business in Texas, that 28 U.S.C.
§ 1391(a) controls, and that venue is improper as to Seguros alone.
In fact, the record reveals that Marinelli contended that venue was
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proper as to Seguros because Seguros could be sued in any district
as an alien under 28 U.S.C.§ 1391(d)1, and that Seguros's status as
an alien corporation was undisputed. As long as Pan American was
joined as a defendant, venue was proper only in those districts
where venue is proper as to the non-alien defendant, that is, Pan
American. Once Pan American was dismissed, there was no bar to
venue in the Southern District of Texas as to Seguros.
Pan American, arguing on behalf of Seguros, suggests that we
affirm Seguros's dismissal on the basis of lack of personal
jurisdiction. However, the question of personal jurisdiction has
nothing to do with venue. James Talcott, Inc. v. Allahabad Bank,
Ltd., 444 F.2d 451 (5th Cir.), cert. denied, 404 U.S. 940, 92 S.
Ct. 280, 30 L. Ed. 2d 253 (1971). We decline to make a
determination concerning personal jurisdiction, since neither the
pleadings and evidence below, the district court's opinion, nor the
parties affected have developed that issue.
CONCLUSION
We affirm the district court's dismissal of Pan American,
reverse the dismissal of Seguros for improper venue, and remand for
further proceedings consistent with this opinion.
AFFIRMED in part, REVERSED in part, and REMANDED.
1
"An alien may be sued in any district." 28 U.S.C. 1391(d)
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