Opinion
02-23-00404-CV
08-30-2024
Manoj Katuwal and Bhes R. Ghimire, Appellants v. Bisharjana Kafle, Appellee
On Appeal from the 153rd District Court Tarrant County, Texas Trial Court No. 153-327447-21
Before Kerr, Wallach, and Walker, JJ.
MEMORANDUM OPINION
MIKE WALLACH JUSTICE
Appellants Manoj Katuwal and Bhes R. Ghimire (collectively Katuwal and Ghimire or Appellants) sued Appellee Bisharjana Kafle to enforce an alleged oral contract under which Kafle agreed to sell Appellants her shares in Ferguson International, Inc., the company she owned with Appellants. Kafle moved for no-evidence and traditional summary judgment on Appellants' claims. Shortly before the summary judgment hearing, Appellants filed their own summary judgment motion. The trial court granted Kafle's motion without considering Appellants' motion. On appeal, Appellants argue that the trial court erred by granting summary judgment for Kafle, by not granting their motion, and by not sustaining their objections to Kafle's summary judgment evidence.
Appellants' summary judgment motion was untimely, and the trial court did not err by not considering it. However, even considering the evidence challenged by Appellants, Kafle did not establish her entitlement to summary judgment, and we will therefore reverse.
Background
Katuwal, Ghimire, and Kafle own Ferguson, which owns a convenience store. The company has a loan through the Small Business Administration (SBA). Kafle wanted to sell her shares in the company and to be released as a guarantor on the SBA loan, and in July 2019, the parties held a meeting to discuss the matter.
Appellants contend that, at that meeting, the parties reached an oral agreement for Kafle to sell all her shares to them for the amount that she had invested in the company and that Kafle offered to have an attorney draft a written contract with the terms they had discussed. After the meeting, Kafle drafted a letter of intent, and her attorney drafted an agreement. The parties spent several months discussing various terms, but no written contract was agreed to or signed.
In August 2021, Appellants sued Kafle to enforce the alleged oral agreement. They sought specific performance and a declaration that they could "cause [Kafle's] shares to be cancelled and reissued to [Appellants] upon [Appellants'] payment to [Kafle] of $84,486 less damages and attorneys' fees awarded to [Appellants]."
Kafle answered and filed a combined traditional and no-evidence motion for summary judgment. As discussed in more detail below, the motion asserted that the parties had no meeting of the minds on price, time for performance, or number of shares to be sold, and that the alleged oral agreement did not place any restrictions on any party's selling their stock before performance. The motion further asserted that Kafle's evidence negated the occurrence of conditions precedent to her performance; she alleged that her performance was conditioned on her being released as a guarantor of the SBA loan and on the signing of a written agreement, neither of which had occurred.
To her motion, Kafle attached a draft letter of intent, a draft share purchase agreement, multiple email exchanges involving the parties, and excerpts from Katuwal's and Ghimire's depositions. In Katuwal's deposition, he stated that on July 21, 2019, the parties had "all agreed on verbal" and that Kafle would be "the one going to draft what we agreed and she[ was] going to draft the contract and sign the contract thereon."
English is not the first language for Katuwal or Ghimire.
Email exchanges included with the motion showed the parties attempting to agree to a written contract. In an email dated April 7, 2020, Katuwal responded to a draft agreement sent to him by Kafle. The email complained that Kafle had revised a previous draft to add terms that she wanted but had not included terms requested by Appellants, and he warned that they could not agree to it if their terms were not included:
This is [the] same contract [that] you sen[t] us [the] very first time. You only added Article 11, section 2.2. under 2.2.4. with $$ amount, that's all. [H]ow about our[ ] terms and conditions? This is only your way of contract, trust me we have to have some of our[ ] terms and condition[s] in this contract as well. [In e]very contract, [the] Buyer has some condition[s] and [the] Seller has some condition[s, and] both part[ies] ha[ve] to agree on some point. [T]his is just your version of [a] contract[, and] if you do not wish or [are un]willing to add . . . some [of our] conditions[, I] dont think we can agree in this contract.
A week before the summary judgment hearing, Katuwal and Ghimire filed a response to Kafle's motion combined with their own summary judgment motion. Appellants' motion asserted that the summary judgment evidence established that (1) the only terms of the parties' enforceable oral agreement were Kafle's agreement to sell her shares in exchange for Appellants paying her the amount that she had originally paid for them; (2) to the extent that their agreement included a term for Kafle to be released as guarantor, she waived it by accepting a down payment; and (3) Kafle had failed to perform under the agreement. Appellants attached their own affidavits; excerpts from Katuwal's deposition; excerpts from Kafle's deposition; Kafle's response to Appellants' interrogatories; and the declaration of Ganga Thapa, who said that he had been at the July 21, 2019 meeting and that Kafle agreed to sell her shares for the amount she had paid for them.
Appellants stated in their affidavits that on July 21, 2019, the parties made an oral agreement for Kafle to sell her ownership interest "for the amount that [Kafle] originally paid for her ownership interest" and that Kafle required that they pay her an initial $30,000 down payment, which they provided. They denied that the agreement was conditioned on Kafle's release as a guarantor.
In Kafle's deposition, she addressed the check for $30,000 that Appellants had given her. Kafle said that Katuwal gave her the money after she said at the meeting that she needed money for her brother's wedding and that they did not discuss whether it was a gift, a loan, or an advance on the purchase price. She then clarified that although they did not discuss the purpose of the money, she understood that it was not "a gift for to keep it for free." She said, "I don't know if it was loan. If the --if we came to terms about the agreements at the later on about all this transactions, then it would be about down payment or something like that. If not, then it would be a loan that I had to pay back." She hesitated to call it a "down payment" when she had not yet met with a lawyer and the parties had not agreed to all the terms for a sale, but she said that "potentially down the road, if [they] agree[d] on a deal, then that would be part of the money that they don't have to pay" for the sale.
Appellants' summary judgment response included objections to most of Kafle's evidence, and Kafle filed a response to Appellants' summary judgment motion in which she addressed Appellants' objections. She also filed objections to Appellants' evidence, including an objection that Thapa's declaration was not executed in accordance with Texas Civil Practice and Remedies Code Chapter 132. Appellants responded to Kafle's objections and attached a revised version of Thapa's declaration to address the issues Kafle had noted.
On May 4, 2023, the trial court signed an order stating that Kafle's motion was "due to be" granted and that "there is no genuine issue of material fact as to [Appellants'] claim of breach of contract, specific performance, and/or declaratory judgment." The order further stated that it finally disposed of all parties and all claims, but it also ordered that any attorney's fees would be determined in a separate submission. After Kafle submitted evidence related to attorney's fees, the trial court signed an order denying Kafle's attorney's fees request. The trial court subsequently signed a final order that granted Kafle's motion, reiterated that there was no genuine issue of material fact as to Appellants' claims, ordered that all of Appellants' claims and requested relief were denied, and denied Kafle's request for attorney's fees. The trial court's order did not rule on the parties' evidentiary objections, and the court did not sign a separate order addressing them.
The trial court's final order specifically stated that the court had considered "the summary judgment evidence, including affidavits, discovery, documentary evidence and [Katuwal and Ghimire's] pleadings, and the argument of counsel." However, Appellants do not argue that the trial court impliedly ruled on the objections. See Seim v. Allstate Tex. Lloyds, 551 S.W.3d 161, 166 (Tex. 2018); LG Chem Am., Inc. v. Wilson, No. 14-22-00371-CV, 2023 WL 4733142, at *2 (Tex. App.- Houston [14th Dist.] July 25, 2023, no pet.) (mem. op.). Regardless, for purposes of our analysis, we consider all the evidence before the trial court.
Standard of Review
We review de novo a trial court's order granting summary judgment. Hillis v. McCall, 602 S.W.3d 436, 439 (Tex. 2020); Tarr v. Timberwood Park Owners Ass'n, 556 S.W.3d 274, 278 (Tex. 2018). We consider the evidence presented in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if a reasonable factfinder could, and disregarding evidence contrary to the nonmovant unless reasonable a factfinder could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009).
A party moving for traditional summary judgment has the burden to prove that no genuine issue of material fact exists and that he is entitled to judgment as a matter of law. Hillis, 602 S.W.3d at 439-40; ConocoPhillips Co. v. Koopmann, 547 S.W.3d 858, 865 (Tex. 2018); see Tex. R. Civ. P. 166a(c). If a party moves for no-evidence summary judgment on the ground that there is no evidence of one or more essential elements of a claim on which the opposing party would have the burden of proof at trial, the movant must specify the elements for which there is no evidence. Tex.R.Civ.P. 166a(i); Timpte Indus., Inc. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009). If the nonmovant brings forward more than a scintilla of probative evidence that raises a genuine issue of material fact on the challenged element, then a no-evidence summary judgment is not proper. Smith v. O'Donnell, 288 S.W.3d 417, 424 (Tex. 2009); King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003).
Discussion
I. Katuwal and Ghimire's Summary Judgment Motion
We begin with Katuwal and Ghimire's second issue in which they argue that the trial court erred by not granting their motion for summary judgment. They argue that because the only evidence before the trial court was sworn evidence from Katuwal and Ghimire and a reliable third-party supporting Katuwal and Ghimire's version of the facts, and because there was no evidence submitted by Kafle that supported her version of the facts, the trial court should have granted their motion.
The trial court heard Kafle's motion by submission on May 4, 2023. It did not consider Appellants' motion at the hearing. Ordinarily, "[w]hen both sides move for summary judgment and the trial court grants one motion and denies the other, the reviewing court should review both sides' summary judgment evidence and determine all questions presented" by the motions. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000). Here, however, Appellants filed their combined response and motion on April 27, 2023, which was only a week before the submission hearing on Kafle's motion. Appellants asked the trial court coordinator to set a hearing on their motion "at least 21 days from" the date of their filing. See Tex. R. Civ. P. 166a(c). A hearing in accordance with Appellant's request and Rule 166a(c) would have made the hearing date no sooner than May 18, with Kafle's response due by May 11-that is, a week after the May 4 summary judgment hearing. See id.
Appellants do not argue on appeal that the trial court should have continued the hearing on Kafle's motion, and even if they had, they did not object to the trial court's considering Kafle's motion on May 4 and did not ask the court to reset that hearing so that the court could consider both motions together. See Tex. R. App. P. 33.1.
Appellants' filing was timely as a response to Kafle's motion but not timely as a cross-motion. See Lykken v. Kindsvater, No. 02-13-00214-CV, 2014 WL 5771832, at *5 (Tex. App.-Fort Worth Nov. 6, 2014, no pet.) (per curiam) (mem. op.) (stating that cross-motion for summary judgment was not timely because it was not filed and served at least twenty-one days before the summary judgment hearing); Jones v. Ill. Emps. Ins. of Wausau, 136 S.W.3d 728, 735 (Tex. App.-Texarkana 2004, no pet.) (same). Appellants did not obtain the trial court's permission to file their motion late. Because Appellants' motion was not a timely cross-motion, the trial court did not err by declining to consider it at the hearing. We overrule Appellants' second issue.
II. Kafle's Summary Judgment Motion
In their first issue, Katuwal and Ghimire argue that the trial court erred by granting Kafle's summary judgment motion because she submitted no evidence that supported her version of the facts and because the only evidence before the trial court was sworn evidence from Katuwal, Ghimire, and Thapa. In their third issue, Appellants argue that the trial court erred by not striking most of Kafle's exhibits.
Appellants say in their brief that Thapa's declaration supports Appellants' version of what happened at the meeting. However, the affidavit is sparse and does not mention the release, which was discussed at the meeting. Further, although Appellants call Thapa a close friend of Kafle's and say that Kafle admitted in her deposition that Thapa "does not lie," these characterizations exaggerate what she said. Kafle stated that she "do[es]n't know nothing about" Thapa lying about anything and that her parents knew him or his parents because they "are from the same part of the country," but she "never met him until [she] got over here."
A. Evidentiary Objections
Appellants made three categories of objections to Kafle's summary judgment evidence. First, for three of Kafle's exhibits, which she had relied on to support the factual allegations in her motion, Appellants objected that she had not referenced them in the argument section of her motion. Second, for another exhibit-excerpts from Katuwal's deposition-they objected that although she had referenced pages from the deposition in her motion, she had failed to attach all of the referenced pages. Kafle responded to this objection by attaching those missing pages to her reply as Exhibit J.
Finally, for all but one of her exhibits, Appellants objected that she had not authenticated them. Kafle asserted in her reply that she did not need to authenticate them because they had been produced by Appellants in discovery, as evidenced by the Bates numbers stamped on the documents. See Tex. R. Civ. P. 166a(d); McConathy v. McConathy, 869 S.W.2d 341, 342 & n.2 (Tex. 1994); Cotten v. Cotten, 169 S.W.3d 824, 829 (Tex. App.-Dallas 2005, pet. denied). Katuwal and Ghimire did not deny that they produced these documents, which included emails from their attorney.
One of the exhibits is the letter of intent, which Kafle's motion asserts was drafted by her after the parties' meeting. However, from the document's format, it seems to be addressed to Kafle. Kafle had previously notified Appellants of her intent to rely on a copy of a letter of intent that had been produced by Appellants in discovery, see Tex. R. Civ. P. 197.3, and that notice also included an email from Appellants' attorney sending Kafle a letter of intent, the terms of which Kafle did not accept. Nevertheless, because Kafle's motion states that she drafted Exhibit B, and Appellants did not dispute that fact, we accept that assertion for purposes of this opinion. Neither party discussed how the two letters of intent may have differed.
On appeal, Appellants did not cite any authority to support their authentication argument regarding these exhibits or to contradict Kafle's argument. In fact, they provided no authority at all in the part of their brief addressing their objections to Kafle's evidence, and in their reply brief, they provided authority only to support their argument regarding Exhibit J, which Kafle had attached to her reply to their summary judgment response. See Tex. R. App. P. 38.1(i).
Additionally, Appellants did not obtain a ruling on their objections, and thus all of the evidence included with Kafle's motion remains part of the summary judgment record. Seim, 551 S.W.3d at 164-65; Castro v. Am. Express Nat'l Bank, No. 02-23-00196-CV, 2024 WL 3059046, at *4 (Tex. App.-Fort Worth June 20, 2024, no pet.) (mem. op.). Nevertheless, even if they had preserved their objections, and even if the trial court should have excluded the exhibits to which Appellants objected, our disposition of this appeal would remain unchanged. As discussed below, even if we consider all of Kafle's evidence, including Exhibit J, she was not entitled to summary judgment.
B. Kafle's Summary Judgment Grounds
In Kafle's motion, under the section setting out her summary judgment grounds, she asserted, "[t]here is no evidence of one or more of the elements of breach of contract . . . [s]pecifically, [Appellant]s cannot provide sufficient evidence to establish the existence of a valid oral contract between the parties and cannot provide evidence to establish the element of a meeting of the minds." That is the extent of the description of her no-evidence grounds. Her motion further contains a section titled "Traditional Motion for Summary Judgment," and under that section, she discussed the contract terms for which the parties had no meeting of the minds: price, the time of performance, and the number of shares to be sold. At the end of the section discussing these terms, she concluded by stating that "[f]or these reasons, the [trial c]ourt should grant [Kafle's] motion for no[-]evidence summary judgment." Thus, for purposes of this opinion, we construe her motion to have raised both no-evidence and traditional grounds as to her no-meeting-of-the-minds arguments.
Kafle's motion also asserted that her release as guarantor and the execution of a written agreement were both conditions precedent to performance. But these grounds appear to have been raised only as traditional grounds, and thus we review them on that basis alone.
1. Kafle's Release as Guarantor
We generally consider a no-evidence motion before addressing a traditional motion. B.C. v. Steak N Shake Operations, Inc., 598 S.W.3d 256, 260-61 (Tex. 2020). However, although Kafle's summary judgment ground addressing her removal as a loan guarantor was raised as a traditional ground, we begin with it because one of her no-evidence grounds relies on it in part.
"A condition precedent may be either a condition to the formation of a contract or to an obligation to perform an existing agreement." Allstate Ins. Co. v. Irwin, 627 S.W.3d 263, 270 (Tex. 2021). Kafle's summary judgment ground asserted her release as guarantor as a condition precedent to performance. "Conditions precedent to an obligation to perform are those acts or events, which occur subsequently to the making of a contract, that must occur before there is a right to immediate performance and before there is a breach of contractual duty." Campbellton Rd., Ltd. v. City of San Antonio ex rel San Antonio Water Sys., 688 S.W.3d 105, 120 (Tex. 2024) (quoting Allstate, 627 S.W.3d at 270). As we explain, Kafle's evidence did not establish the existence of the condition, and even if it had, Katuwal and Ghimire's evidence raised a fact issue about it.
Appellants do not dispute that at their meeting, they discussed Kafle's being released as a guarantor on the loan. The parties' arguments and evidence, discussed below, suggest three possibilities about what agreement, if any, they reached on that point:
(1) Kafle's performance under the agreement was conditioned on the parties' obtaining Kafle's release;
(2)taking the necessary steps to obtain a release was not a condition precedent to Kafle's obligation to sell her shares, but Appellants' failure to take those steps or to otherwise protect Kafle from liability as a guarantor would constitute a breach of the agreement; or
(3) the parties agreed that they would all go to the bank and request Kafle's release, but obtaining a release-or even requesting one-was not part of the agreement for the sale of Kafle's shares.
Appellants argue that, at most, the evidence establishes the third proposition, and Kafle argues that the evidence establishes the first. However, Kafle failed to establish this ground as a matter of law and instead produced evidence raising a question about whether the parties had agreed to the second proposition.
Appellants' response to Kafle's summary judgment motion acknowledged that the parties had discussed "attempting to obtain a release for [Kafle] from the SBA loan" and had agreed "to go to the bank and attempt to get a release from the loan," but they contended that Kafle's request that they talk to the bank about a release was entirely separate from her offer to sell her shares, even though they were discussed in the same meeting.
Kafle primarily relied on Katuwal's deposition excerpts. However, even to the extent that Katuwal's deposition shows that the agreement contained a term addressing a release, his testimony does not establish as a matter of law that Kafle had no obligation to sell her shares unless the release occurred. Katuwal stated that at the parties' meeting to talk about a possible sale, they discussed both Appellants' buying Kafle's shares and "the loan," and he said that they "all agreed on the price, sums and condition with the loan, and [Kafle] ha[d] to go to [an] attorney [to] get the draft [of] what we all agreed and sign." [Emphasis added.] He further stated that when Kafle offered to sell her shares, she said, "I don't want to be part of the company. Please pay me whatever I invested and get out from the guarantor and the loan," and he stated that he and Ghimire accepted her offer. This testimony is evidence that, contrary to Appellants' argument, the parties' agreement contained a term related to the release.
However, Katuwal also made multiple statements suggesting that they did not agree that Kafle would have no obligation to sell if no release could be obtained. He stated, "we all agreed [to] go to the bank and process, remove her [as] guarantor," and "related to the bank loan, yes, we all have to go to the bank. . . . [W]e all agreed verbally, if necessary, we all have to go to the bank together and talk to the bank" once a contract had been signed. Once the parties had signed a contract, "we'[d] show [the contract] to the bank[, and the] Bank will request [the] SBA to remove her as a guarantor. So we have to prove our side we purchased her share, and they will take our - the credit and everything." [Emphasis added.] This testimony is evidence that the parties agreed to undergo the process to remove Kafle as a guarantor, but it suggests that they would do that after Appellants purchased Kafle's shares. Katuwal's testimony merely raises a fact issue about what the condition precedent was, if any, and does not establish as a matter of law that Kafle's release was a condition to her performance.
In an excerpt from Katuwal's deposition attached to Appellants' summary judgment response, he appeared to acknowledge that their agreement had some sort of condition. He was asked what in the written contract that Kafle's attorney had drafted was different from what Katuwal had expected based on the parties' meeting. He stated, "[The d]ifferen[ce] was [that] she want[ed] [a] different type of the price, full price, and the condition was different [i]n the writing." [Emphasis added.] However, he did not explain what condition the parties had discussed at the meeting.
Similarly, Kafle's other evidence indicated that the parties all understood that Kafle wanted to be released from the loan but failed to establish as a matter of law that Kafle had no obligation to sell her shares until she was released. The letter of intent, which Kafle's motion stated was drafted by Kafle after the parties' meeting, provided that she had to be released from the guarantee in order for the sale to be completed. Kafle's Exhibit H-an email between employees of the bank that held the loan, which was forwarded to Katuwal-discussed what documents the parties would need to submit to obtain a release. That email was some evidence that Katuwal had contacted the bank to ask about a release. In another email from Katuwal to Kafle asking for revisions to some of the draft agreement's terms, he asked that the terms relating to the guaranty state that Appellants would start the process of removing Kafle from the loan, that Kafle would allow 90 days to complete the process, and "if nothing happen[ed] with[ ]in 90 days[,] [Kafle] will be entitled [to] $2000 penalty payment." An email between Katuwal and Appellants' attorney stated that only the bank could release Kafle, so that needed to occur before closing, but another email from the attorney stated that the parties' contract needed to include language "explaining the plan to apply for release in 2 to 3 years." This evidence indicated that all the parties understood the agreement to include a term related to the release, but it did not establish as a matter of law that obtaining the release was a condition precedent to Kafle's performance.
Finally, a version of the agreement drafted by Kafle's attorney provided that Appellants would assume from her "any and all obligations to repay" the loan and that the parties would "make mutual efforts to apply for [Kafle's] release on the Loan after March 6, 2021" or to repay the loan or refinance it without Kafle. [Emphasis added.] The draft provided that Appellants' failure to secure refinancing or obtain Kafle's release would constitute a breach of the agreement. In an email, Katuwal had asked Kafle to make some amendments to those terms-giving them the 90 days noted above to complete the release process and imposing a penalty for failure to perform-and the draft appeared to include those changes.
In summary, under Kafle's letter of intent, she was relieved of her obligation to perform if the bank did not release her, but the agreement that her attorney drafted contained release-related terms but did not condition the sale's closing on the obtaining of a release. Thus, Kafle's own evidence raised a fact issue about whether the parties had agreed that her performance was conditioned on her release or that the failure to obtain a release would constitute a breach by Appellants.
Because Kafle's summary judgment evidence did not establish as a matter of law that her obligation to sell her shares was conditioned on a release occurring before closing, she was not entitled to summary judgment on this ground. We sustain this part of Appellants' first issue.
2. Sale Price
We now turn to the grounds for which Kafle raised both no-evidence and traditional grounds. We first address Kafle's contention that Appellants could not establish a meeting of the minds because no evidence showed that the parties had agreed on a price for the sale of her shares.
Katuwal and Ghimire produced sufficient summary judgment evidence to raise a fact issue about whether the parties had agreed to a price. Specifically, they both stated in affidavits that the parties had agreed at their meeting that Kafle would sell her shares for the same amount that she had invested in the company. The affidavits further set out how much Kafle had invested. This is some evidence that the parties had agreed to a sales price at their meeting. Thus, Kafle was not entitled to no-evidence summary judgment on this ground.
Kafle was also not entitled to traditional summary judgment on this ground because her evidence did not establish as a matter of law that the parties had not agreed on a price. The letter of intent, which, again, Kafle's motion claimed she had drafted, said that the purchase price was $114,486. Her draft agreement also listed that amount as the purchase price. That amount matches the price asserted by Appellants: Kafle's investment of $121,450 minus $6,964 that she had allegedly been previously refunded. Thus, Kafle's own exhibits include some evidence that after the meeting, Kafle understood that the parties had agreed to a price. See Fischer v. CTMI, L.L.C., 479 S.W.3d 231, 241 (Tex. 2016) (holding that agreement was sufficiently definite and certain on price because it "provided a clear formula or standard by which to determine the payments" owed).
The parties exchanged multiple emails discussing various terms for a written agreement. One of the documents included in Kafle's Rule 197.3 notice was a July 27, 2020 email in which Appellants' attorney stated that his clients would "only keep their offer to purchase [Kafle's] shares in Ferguson . . . open until Wednesday, July 29, 2020, at 8:00 P.M." This email suggested that, at that point (i.e., after the parties' meeting at which an agreement had allegedly been made), Appellants did not believe that the parties had yet reached an agreement to which they were bound. However, Kafle did not reference or rely on this email in her summary judgment motion.
The emails attached to Kafle's motion provided some indication that after the meeting, Kafle had sent the parties another draft agreement with a different price: $1,063,391.22. That amount was the original purchase price as discussed plus the outstanding principle on the loan. The new proposed term called for the $114,486 to be paid at closing and the remainer to be paid by a promissory note that would be forgiven if the loan were to be paid off. This is some evidence that Kafle wanted the price to address what the parties had apparently learned about the release process- namely that the SBA had to approve the release and that it might not be possible to accomplish the release before closing. If the parties' agreement required the release as a condition to Kafle's performance, then revising the agreement as Kafle proposed could allow the sale to close even without a release. However, the evidence that Kafle had proposed this term some time after the parties' meeting does not establish as a matter of law that the parties had not agreed on a price at their meeting. Accordingly, we sustain this part of Appellants' first issue.
3. Number of Shares
Kafle's no-evidence and traditional motions further asserted that the parties had not agreed to a restriction of any party selling their stock before performance or the amount of stock that Kafle would sell at the time of performance. As for the no-evidence motion, Appellants raised a fact issue on this ground. Katuwal stated in his deposition that Kafle asked them to buy her share of the company. Further, Katuwal stated in his affidavit that under their agreement, Kafle's "35% interest would be split evenly between" Appellants. Ghimire said the same thing in his affidavit. This is at least some evidence that Kafle offered to sell all her shares to Appellants. This evidence is thus sufficient to raise a fact issue about whether the parties agreed that Kafle would sell to Appellants her entire interest in the company, and Kafle was not entitled to no-evidence summary judgment on this ground.
Further, Kafle's evidence did not establish as a matter of law that the parties had not reached an agreement on the number of shares to be sold. For example, the letter of intent that Kafle supposedly drafted after the parties' meeting states, "It is the intent of the Transaction that, upon completion of the Trade between the parties, the Buyers will have 100% ownership of the outstanding shares belonging to Ferguson." This exhibit is some evidence that Kafle had agreed to sell all her shares to Appellants and to no one else. Given the evidence presented to the trial court, Kafle was not entitled to traditional summary judgment on this ground.
In her appellate brief, Kafle relied on two cases, Gannon v. Baker, 830 S.W.2d 706, 710 (Tex. App.-Houston [1st Dist.] 1992, writ denied), and Selzer v. Dunn, No. 12-12-00150-CV, 2014 WL 356992, at *4 (Tex. App.-Tyler Jan. 31, 2014, pet. denied) (mem. op.), for the proposition that if an alleged oral agreement "is so indefinite that it is impossible for a court to fix the legal obligations and liabilities of the parties, it cannot constitute an enforceable contract," Gannon, 830 S.W.2d at 709. Based on this authority, Kafle argues that an oral agreement to transfer stock must include a term specifying the quantity of shares to be transferred and the price. See Selzer, 2014 WL 356992, at *4. But we have already held that the summary judgment evidence raises a fact issue about whether the parties did agree to the amount of Kafle's stock that she would sell to Appellants and the price for that stock. Accordingly, these cases do not support the trial court's summary judgment for Kafle.
4. Time for Performance
Finally, Kafle contends that the parties did not agree on a time for performance and that without a specific date and a restriction on her selling her stock before performance, the amount of stock that she had to transfer could "fluctuate drastically" due to her selling shares to a third party. In her summary judgment motion, Kafle asserted that the parties had no meeting of the minds because they had not designated a specific date for performance and that they could not have agreed on a performance date at the meeting because they did not yet know when or if Kafle could be released as a guarantor.
We have already held that Kafle failed to establish as a matter of law that the agreement conditioned Kafle's performance on Appellants' obtaining a release, and thus she has not established that the parties could not close on the transaction before a release was obtained. As for time for performance generally, Kafle was not entitled to summary judgment on that basis.
"The material terms of a contract are determined on a case-by-case basis, with each contract considered separately." Yazdani-Beioky v. Sharifan, 550 S.W.3d 808, 823 (Tex. App.-Houston [14th Dist.] 2018, pet. denied) (citing Fischer, 479 S.W.3d at 237); see also RDA Prof'l Beauty Supply Inc. v. Clay, No. 12-23-00050-CV, 2023 WL 8658711, at *6 (Tex. App.-Tyler Dec. 14, 2023, no pet.) (mem. op.) ("An appellate court decides whether a contract contains all essential terms on a case-by-case basis, and the 'primary purpose' of the contract governs this determination."). Although Katuwal and Ghimire did not separately discuss the time-for-performance ground in their response, they argued the material terms of the agreement were the price in exchange for the transfer of all Kafle's shares, and they produced some evidence that the parties had agreed to those terms. See Selzer, 2014 WL 356992, at *4 ("With respect to an oral agreement to transfer stock, the terms must state the specific quantity of shares and the specific price in order to be considered clear, certain, and definite."). Thus, Appellants produced some evidence that the parties had agreed on the material terms.
Aside from that, Appellants paid Kafle $30,000, and their affidavits were some evidence that this money was a partial payment on the purchase price. See Fischer, 479 S.W.3d at 240 (noting that partial performance of an agreement "may remove uncertainty and establish that a contract enforceable as a bargain has been formed"). "[T]he law disfavors forfeitures, and contracts are construed to avoid them," especially when parties have partially or fully performed. Smith v. Barnhart, 576 S.W.3d 407, 417 (Tex. App.-Houston [1st Dist.] 2019, no pet.) "Thus, if the parties' conduct shows that they clearly intended to agree, and a reasonably certain basis for granting a remedy exists, we will find the contract terms definite enough to provide that remedy," and in that circumstance, "we may imply material terms that can reasonably be implied," such as the time for performance. Id. (citing Fischer, 479 S.W.3d at 239). Even if time for performance was a material term in the parties' agreement, then, Appellants produced some evidence that the parties intended to agree, that they had in fact agreed on other material terms, and that Appellants had partially performed. Accordingly, Kafle was not entitled to summary judgment on the basis that no evidence existed to show a meeting of the minds because the parties had not agreed on a time for performance. See id.
As for Kafle's traditional motion on this ground, her evidence does not establish that the parties had not agreed on a time for performance. She produced some summary judgment evidence the parties may have initially agreed to a closing date in March of 2020 or 2021 but that the date was flexible. The letter of intent stated that "[t]he Buyers and the Seller shall negotiate in good faith to arrive at a mutually acceptable Final Agreement for approval, execution[,] and delivery on or before March 6, 2020," and also that "[t]he parties intend to execute the Final Agreement upon approval of Seller's release on current loan, approval of refinance on current loan, upon sale of Ferguson, or by March 6, 2021, whichever occurs sooner." It further provided that the closing date could be extended by consent of both sides. An email from Katuwal to Kafle in April 2020 stated that "[o]ur closing date was March 6[,] 2019," but that year appears to be a mistake because the parties did not even meet to discuss the sale until July of that year. Another email to Kafle from Katuwal stated, "[Y]ou know that we can[ ]not close before March 6[,] 2021[,] and you gave us time 3 month to close, if some[ ]how it get[s] delay[ed][,] you will be entitled for [$]2000, that was our deal." [Emphasis added.] This email is some indication that at one point, the parties had reached an agreement regarding time for performance.
In sum, Kafle's evidence merely raises a fact issue about whether the parties had agreed to a time for performance. Consequently, Kafle was not entitled to traditional summary judgment on this ground. We sustain this part of Appellants' first issue.
5. A Written, Signed Agreement
Finally, we address Kafle's remaining traditional summary judgment ground. Kafle alleged in her motion that having a written, signed agreement was a condition precedent. She asserted that Katuwal and Ghimire admitted that "they would not perform full payment until after a written contract had been drafted and agreed to by all parties." Kafle hired an attorney to draft an agreement, negotiations ensued, but "[d]espite negotiations, the written contract was never agreed to and signed by all parties." Kafle argues that "[t]here would have been no need to continue negotiations if the parties had discussed all the terms necessary to create a contract."
Parties may agree to material and essential terms even when they contemplate that a formal writing will be executed in the future or when they leave non-essential terms open for future agreement. See Fischer, 479 S.W.3d at 237, 241; Shirvani v. Celebrity Healthcare Mgmt., LLC, No. 05-19-00192-CV, 2020 WL 1887894, at *5 (Tex. App.-Dallas Apr. 16, 2020, pet. denied) (mem. op.) (holding that email contemplating execution of future documentation did not prevent the email from being an enforceable contract); cf. McCalla v. Baker's Campground, Inc., 416 S.W.3d 416, 418 (Tex. 2013) ("Agreements to enter into future contracts are enforceable if they contain all material terms."). If a contract is "'about as definite and certain as the parties could have made it under the circumstances and [is] sufficiently definite and certain to furnish a basis for arriving with reasonable certainty at the minimum damages,' the contract is enforceable." Fischer, 479 S.W.3d at 241.
The summary judgment evidence establishes that both sides anticipated a future writing memorializing the parties' agreement. However, to be entitled to summary judgment on this ground, Kafle's evidence needed to establish as a matter of law that a future written agreement executed by all parties was a condition precedent to her selling her shares. See Shirvani, 2020 WL 1887894, at *5. She did not meet that burden.
In Exhibit J, the excerpts of Katuwal's deposition, he stated that Kafle had volunteered to draft the contract based on what the parties had discussed, which showed only that the parties wanted to memorialize their agreement. The emails produced by Kafle showed that the parties were still negotiating the wording of at least some terms, and they raised a fact issue about whether the parties wanted to close without a written agreement that included those terms. One email from Kafle indicated that she had sent a draft with a different term regarding payment and the release, as discussed above. In another email, Katuwal seemed irritated because Kafle had sent an agreement draft that did not include "terms and conditions" that Appellants had requested. The email did not say what those terms were. The email went on to say that in every contract, both sides have "some condition[s]" and that both sides have "to agree on some point." He concluded by saying that "if you do not wish or [are un]willing to add our[ ] . . . conditions[,] I don't think we can agree in this contract."
These emails raised a fact issue about whether the parties believed they had an enforceable agreement at that point and whether the parties wanted to close without a written agreement that included terms requested by both sides. However, the evidence did not establish as a matter of law that no agreement on material terms had been reached at the parties' meeting, see McCulley Fine Arts Gallery, Inc. v. X Partners, 860 S.W.2d 473, 477 (Tex. App.-El Paso 1993, no writ) (noting that when essential contract terms have been agreed upon, non-essential terms may be left open for later negotiation), or that Kafle would have no obligation to sell until a written agreement was signed by all parties. Accordingly, Kafle was not entitled to traditional summary judgment on this ground. We sustain the remainder of Appellants' first issue.
III. Summary
In summary, this case represents a classic swearing match for which summary judgment was not appropriate. There was some evidence that the parties had orally agreed on the material terms of the agreement and some evidence that Kafle's release was either a condition or term of the agreement. There was some evidence that the parties contemplated memorializing their agreement in writing and some evidence that the parties did not intend to be bound until they had negotiated and signed a written agreement. Further, there was evidence that Appellants had paid Kafle money and some evidence that the money was either a down payment or a loan. Because no evidence negated as a matter of law the elements challenged by Kafle or established the existence of conditions precedent that had not been satisfied, she was not entitled to summary judgment, and we therefore sustain Appellants' first issue. Because we sustain Appellants' first issue even when considering Kafle's objected-to summary judgment evidence, we need not address Appellants' third issue. And because Appellants did not timely file their summary judgment motion, we overrule their second issue.
Conclusion
Having overruled Appellants' second issue and sustained Appellants' first issue, and because our holdings on those issues moot Appellants' third issue, we reverse the trial court's judgment and remand for further proceedings.