In a case we missed the first time around, the Texas Supreme Court has denied review of a Dallas Court of Appeals decision reversing part of a summary judgment against a Dallas-based common carrier on claims asserted under Mexican law.
Jose Luis Varela as Representative of the Estate of Maria Soledad Varela de Lopez (Deceased), Carmen Hernandez, Jose Hernandez, Marciela Silva, Eligio Silva, and Pedro Rostro v. Zavala Plus, LLC (no. 05-22-01077-CV; October 21, 2024; pet. denied June 20, 2025) arose from a bus accident in Mexico that injured several passengers. Zavala Plus (Defendant), located in Dallas, operated as a common carrier. On May 6, 2018, in San Tiburcio, Mexico, a bus owned by Defendant and driven by Hector Manuel Aldaba Lozano (Aldaba) was involved in a roll-over accident. It was raining, and Aldaba was driving the bus over 70 miles per hour, 15 miles over the speed limit. All of the passengers on the bus were traveling to the United States. Maria Soledad Varela de Lopez sued Zavala Plus in May 2019, and the other Plaintiffs joined suit in January 2020. Maria died, so the administrator of her estate, Jose Luis Lopez Varela, stepped into the suit on behalf of her estate. The only non-passenger Plaintiff, Jose Hernandez, sued for loss-of-consortium based on Carmen Hernandez’s injuries.
Defendant answered and filed a traditional motion for summary judgment that relied principally on two arguments: (1) Zavala Plus was not operating the bus at the time of the accident, and the bus driver was not hired, supervised, or employed by Zavala Plus, and (2) Mexican law applied to all issues in the case, and the plaintiffs were not entitled to relief under Mexican law. The trial court denied the motion. Plaintiffs then amended their pleadings to assert negligence and gross negligence. Defendant requested that the trial court apply Mexican law. After a hearing, the trial court signed an order ruling that Mexican law would apply to several liability and damages issues in the case. Plaintiffs amended their petition, asserting that Texas law applied to their negligence and gross negligence claims. Defendant filed a second motion for summary judgment, which the trial court granted. Plaintiffs appealed.
In an opinion by Justice Garcia, the court of appeals affirmed in part and reversed and remanded in part. Plaintiffs argued that the trial court erred by applying Mexican substantive law to their claims and by granting summary judgment. Regarding the choice-of-law issue, the court observed that “Texas courts apply the rules found in the Restatement (Second) of Conflicts of Laws to resolve choice-of-law questions” (citations omitted), specifically the Restatement’s “most significant relationship” test to determine which state’s law controls” (citations omitted). (The court found that a Mexican state qualified as a “state” for purposes of the Restatment.) Plaintiffs tried to avoid Mexican law by arguing that § 71.031(c), CPRC, but because that statute specifically incorporates the most significant relationship test, any error based on the trial court’s oversight of the statute was harmless.
Plaintiffs next contended that the trial judge erred in making her choice-of-law ruling because Defendant did not adequately prove which body of Mexican law— Mexican federal law or Zacatecan state law—should apply to this case. The court rejected this argument as well, holding that “because Zavala Plus’s expert evidence showed Zacatecan law applied instead of Mexican federal law” and “the trial judge applied Zacatecan law, as Zavala Plus urged in its second summary-judgment motion, and did not apply Mexican federal law,” the trial court committed no error. Plaintiffs next argued that: (1) Zavala Plus did not prove a true conflict between Zacatecan law and Texas law on any issue, and (2) even if Zavala Plus identified some conflicts, the evidence showed that Zacatecan law and Texas law are similar). Not so, the court ruled, because Zacatecan law precludes a non—passenger suing solely for loss-of-consortium damages from recovery, does not recognize joint enterprise as a basis for imposing vicarious liability, limits the amount of actual damages that may be recovered, and bars punitive damages except in airplane-crash cases. Additionally, the liability theories differed in that, as Defendant’s Mexican law expert testified, Zacatecas recognizes only three potential claims in favor of Plaintiffs: (1) subjective liability, (2) objective liability, and (3) common-carrier liability. For these and other reasons, the court ruled that Defendant established that Zacatecan and Texas law materially conflicted.
Turning to the application of the Restatement § 145 most-significant-relationship test factors, the court determined that: (1) the accident occurred in Zacatecas; (2) the conduct that allegedly caused the harm (the bus driver’s speed) occurred in Zacatecas; (3) Defendant was organized under Texas law and had its principal place of business in Texas and Plaintiffs resided in Mexico at the time of the accident; and (4) the parties’ relationships were not centered in Texas and there was no evidence that Defendant’s Texas headquarters played any role in forming the passenger-carrier relationship. Based on these findings, the court concluded that the § 145 factors weighed in favor of Zacatecas as the state with the most significant relationship to the case.
But that wasn’t the end of the inquiry. The court next considered the § 145 factors in light of the policy-oriented factors enumerated in Restatement § 6(2).” It identified two factors relevant to this case: (1) “the relevant policies of the forum” state and (2) “the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue.” The court observed that “[a] state has a strong interest in protecting its residents from harm,” as well as “in adopting and enforcing liability rules that will … deter dangerous conduct within its borders.” A state also has a “strong economic interest in protecting its citizens and businesses from excessive liability claims.” Plaintiffs argued that Zacatecas had no interest in protecting a foreign company like Defendant from excessive liability, but the court disagreed. To the contrary, “[a] state has an interest in protecting non-resident businesses that engage in commerce within the state because that encourages economic activity that may benefit the state’s residents as well as the businesses themselves.” The court thus concluded that Zacatecan interests predominated and that Zacatecan law governed the liability issues in the case. The trial court did not err in applying it.
Plaintiffs did come away with a win, however. As to their respondeat superior claim, the court observed that the trial court granted summary judgment on the basis on Zacatecan law, but the Plaintiffs’ live pleading at the time pleaded only causes of action under Texas law. Plaintiffs accordingly asserted that unpleaded claims cannot support summary judgment, and they complained that Defendant was asking the court of appeals to construe their live pleading in its favor by construing it to plead claims under Zacatecan law. “The briefing thus raises a conundrum,” the court noted. “Appellants pleaded no claims under Zacatecan law, and they urge us to reverse the trial judge’s no-evidence summary-judgment rulings on that basis. But if we were to accept appellants’ position and conclude that they pleaded only Texas-law claims, the no-evidence summary-judgment rulings might be erroneous, but we would nevertheless affirm the take-nothing judgment because we have already concluded that appellants have not shown error in the traditional summary judgment on their Texas-law claims.”
What did the court do about this “conundrum”? The court decided to treat Plaintiff’s live pleading as pleading the claims properly available under the governing law and that Plaintiff’s allegations in their live pleading, liberally construed, sufficed to plead claims available to them under Zacatecan law. The court could consequently “address appellants’ alternative merits-based argument that the trial judge erred by granting no-evidence summary judgment on their claims under Zacatecan law.” With respect to the merits, Plaintiffs argued that their evidence that Defendant owned the bus raised a genuine fact issue of whether the bus driver was Defendant’s employee and acting the course and scope of employment when the accident occurred. It also raised a fact issue on the elements of respondeat superior, which are the same under Zacatecan and Texas law. The court determined the evidence showed that an employee of the Defendant took charge of the luggage on the bus after the accident, supporting an inference that the driver was acting in the course and scope of employment for Defendant when he had the accident. The trial court thus erred by granting no-evidence summary judgment against Plaintiffs for their common-carrier liability claim under Zacatecan law. Plaintiffs likewise submitted a police report as evidence that the bus driver’s conduct was a “direct and immediate cause of the accident.” This was enough to raise a genuine fact question on the issue of causation.
What’s left in the case? Plaintiffs’ claims under Zacatecan law for objective liability and subjective liability on a respondeat superior theory and their common carrier-liability claim (except for the non-passenger’s claim for loss of consortium).
TCJL Research Intern Dilara Muslu researched and prepared the first draft of this article.
