United States Court of Appeals for the Fifth Circuit
186 F.3d 588 (5th Cir.1990)
Lisa Gardemal (plaintiff) and her husband, John, travelled to Cabo San Lucas, Mexico to attend a seminar held at the Westin Regina Resort Los Cabos (Westin Regina). Westin Regina is managed by Westin Mexico (defendant). Westin Mexico is a Mexican corporation and a subsidiary of Westin Hotel Company (Westin) (defendant), a Delaware corporation. While staying at the hotel, the Gardemals decided to go snorkeling. Allegedly, the hotel's doorman directed the Gardemals to a beach that had rough surf and strong undercurrents without warning the Gardemals of the danger. Without knowing the beach's conditions, John went swimming and was swept into the ocean by a rogue wave and thrown against the rocks. John drowned. Gardemal brought wrongful death and survival actions against Westin and Westin Mexico under Texas law, alleging that her husband drowned because Westin Regina's doorman negligently directed them to the beach and failed to warn them of the dangerous conditions. Although Westin and Westin Mexico were closely related through stock ownership, common officers, financing arrangements, etc., the two corporations strictly adhered to their corporate formalities. Further, Westin Mexico was sufficiently capitalized. Westin moved for summary judgment, claiming that it was a separate corporate entity and thus should not be liable for acts committed by its subsidiary. The district court granted Westin's motion for summary judgment based on the magistrate judge's recommendation. The magistrate judge rejected Gardemal's theory that the alter ego and single-business-enterprise doctrines allowed the court to impute liability to Westin. Gardemal appealed.
Rule of Law
Holding and Reasoning (DeMoss, J.)
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