Opinion
No. 08-21-00013-CV
01-23-2023
AMARO OILFIELD AUTOMATION, LLC, Appellant, v. LITHIA CM, INC. d/b/a All American Chevrolet of Midland, Appellee.
James W. Essman, Odessa, for Appellee. Lane A. Haygood, Odessa, for Appellant.
James W. Essman, Odessa, for Appellee.
Lane A. Haygood, Odessa, for Appellant.
Before Rodriguez, C.J., Soto, J., and Marion, C.J. (Ret.), Marion, C.J. (Ret.)(Sitting by Assignment)
OPINION
YVONNE T. RODRIGUEZ, Chief Justice
Appellant's president, Brian Herron, attempted to purchase a pickup truck at Appellee's auto dealership through a transaction Appellant argues was unauthorized by the corporation. Appellant sued Appellee for violations of the Deceptive Trade Practices Act ("DTPA"), common law fraud, and breach of contract. The trial court granted Appellee's motion for summary judgment. We affirm.
This case was transferred from our sister court in Eastland pursuant to the Texas Supreme Court's docket equalization efforts. See Tex.Gov't Code Ann. § 73.001. We follow the precedent of the Eastland Court of Appeals to the extent it might conflict with our own. See Tex.R.App.P. 41.3.
Factual and Procedural Background
Appellee, Lithia CM, Inc., doing business as All American Chevrolet of Midland ("Lithia"), is an auto dealership. On August 22, 2015, Brian Herron, president of Amaro Oilfield Automation, LLC ("Amaro"), Appellant, entered Lithia's place of business, traded in a 2013 Dodge Ram 2500 ("the Dodge"), used a $10,000.00 company check as a down payment, and left with a 2015 Chevrolet Silverado 2500 Duramax ("the Duramax"). At the time of the sale, Herron was listed as Amaro's sole officer, director, or manager in its public information report with the Texas Comptroller. Herron was listed as a managing member in the corporate formation documents filed with the Secretary of State at the end of 2013. Despite these designations, Amaro claimed Herron did not have permission to enter into these transactions.
Amaro sent Lithia a DTPA demand letter in December 2016 claiming the transaction was defective and alleging damages in the form of the $10,000.00 down payment, loss of use of and damage to the Dodge, and the sum of $4,300.00 to secure return of the Dodge from a downstream purchaser. Amaro claimed the transaction was defective because the title to the Dodge was never produced to Lithia and because Lithia's bank rejected financing on the Duramax due to a lack of gap insurance.
Amaro filed suit in February 2017 denying the validity of the contract for sale of the Duramax and bringing claims for breach of contract, violations of the DTPA, and common law fraud. Amaro sought actual damages, multiple damages under the DTPA, and exemplary damages.
Lithia moved for summary judgment on both traditional and no-evidence grounds asserting Herron had actual authority to act on behalf of Amaro, thus a valid contract was formed, and Amaro could provide no evidence of any of the elements of any of its claims. Lithia also argued the economic loss rule applies, barring Amaro from recovering on tort theories because the harm arose from a breach of contract and the only damage available is the subject of the contract. Amaro countered Herron had no authority to act on its behalf and stated it presented "some evidence" to support its claims under the DTPA, for breach of contract, and for common law fraud. Amaro denied the economic loss rule applies.
The trial court granted summary judgment without stating the basis of its decision and this appeal followed.
DISCUSSION
In two issues, Amaro avers the trial court erred in granting summary judgment. In its first issue, Amaro states traditional summary judgment was improper on the issue of actual or apparent authority because, despite grants of authority on file with state agencies, it raised evidence negating that grant of authority. Second, Amaro argues no-evidence summary judgment was improper as to each of his claims because it presented at least some evidence of every element of each cause of action. Standard of Review
We review a trial court's granting of summary judgment de novo. Lujan v. Navistar, Inc. , 555 S.W.3d 79, 84 (Tex. 2018) ; Chau v. Select Med. Corp. , 582 S.W.3d 413, 419 (Tex.App.—Eastland 2018, pet. denied). When, as in this case, a trial court's order granting summary judgment does not specifically state the grounds for granting the motion, we must affirm the judgment "if any of the theories presented to the trial court and preserved for appellate review are meritorious." Haynes v. DOH Oil Co. , 647 S.W.3d 793, 798 (Tex.App.—Eastland 2022, no pet.) (quoting Provident Life & Accident Ins. Co. v. Knott , 128 S.W.3d 211, 216 (Tex. 2003) ).
When the summary judgment being reviewed is based on both a traditional motion under Rule 166a(c) and a no-evidence motion under Rule 166a(i), "we consider the evidence in the light most favorable to the nonmovant, indulging every reasonable inference in favor of the nonmovant and resolving any doubts against the movant." MEI Camp Springs, LLC v. Clear Fork, Inc. , 623 S.W.3d 83, 91 (Tex.App.—Eastland 2021, no pet.). When a movant has sought summary judgment on both no-evidence and traditional grounds, we first review the claims brought under the no-evidence standard. First United Pentecostal Church of Beaumont v. Parker , 514 S.W.3d 214, 219 (Tex. 2017). "If the non-movant fails to meet its burden under the no-evidence motion, there is no need to address the challenge to the traditional motion as it necessarily fails." Id. ; see TEX. R. CIV. P. 166a(c) & (d).
A movant for no-evidence summary judgment asserts there is no evidence of one or more essential elements of the claims on which the nonmovant bears the burden of proof at trial. MEI Camp Springs , 623 S.W.3d at 91 ; see TEX.R.CIV.P. 166a(i). The burden then shifts to the nonmovant, who must produce evidence regarding each challenged element which would allow reasonable and fair-minded people to differ in their conclusions. Ford Motor Co. v. Ridgway , 135 S.W.3d 598, 600-01 (Tex. 2004). A movant's no-evidence point will be sustained when (a) there is a complete absence of evidence of a vital fact, (b) rules of law or of evidence bar the court from giving weight to the only evidence offered to prove a vital fact, (c) the evidence offered to prove a vital fact is no more than a mere scintilla, or (d) the evidence conclusively establishes the opposite of the vital fact. King Ranch, Inc. v. Chapman , 118 S.W. 3d 742, 751 (Tex. 2003).
A movant for traditional summary judgment has the burden of showing no genuine issue of material fact exists and it is entitled to judgment as a matter of law. MEI Camp Springs , 623 S.W.3d at 91 ; see TEX.R.CIV.P. 166a(c). The movant must conclusively negate at least one essential element of the cause of action asserted or conclusively establish each element of an affirmative defense. Id. (citing Sci. Spectrum, Inc. v. Martinez , 941 S.W.2d 910, 911 (Tex. 1997) ). "Evidence is conclusive only if reasonable people could not differ in their conclusions." Id. (citing City of Keller v. Wilson , 168 S.W.3d 802, 816 (Tex. 2005) ). The burden then shifts to the nonmovant, who must present issues or evidence precluding summary judgment. Id. (citing City of Houston v. Clear Creek Basin Auth. , 589 S.W.2d 671, 678-79 (Tex. 1979) ).
Analysis
Because we first review the judgment under the no-evidence standard of review, we consider Amaro's second issue first. Ford Motor Co. , 135 S.W.3d at 600. Lithia's No-Evidence Motion for Summary Judgment
Lithia moved for a no-evidence summary judgment as to each element of all Amaro's claims. We will address each claim in turn.
Breach of Contract
In its motion for summary judgment, Lithia contended Amaro could produce no evidence of these essential elements of its breach of contract claim, citing B&W Sup., Inc. v. Beckman , 305 S.W.3d 10, 16 (Tex.App.—Houston [1st Dist.] 2009, pet. denied) :
1. There is a valid, enforceable contract.
2. The plaintiff is a proper party to sue for breach of the contract.
3. The plaintiff performed, tendered performance of, or was excused from performing its contractual obligations.
4. The defendant breached the contract.
5. The defendant's breach caused the plaintiff injury.
In response, Amaro contended there was a valid contract between the parties because Brian Herron provided a $10,000.00 down payment and a power of attorney to transfer title to the Dodge. Lithia argued Amaro's claim Herron lacked authority to enter into the contract is contrary to its claim a valid contract existed. We agree.
Pleadings do not generally constitute summary judgment evidence. H2O Sols. Ltd. v. PM Realty Group, LP , 438 S.W.3d 606, 616 (Tex.App.—Houston [1st Dist.] 2014, pet. denied). However, a party may "plead itself out of court" if it pleads facts that affirmatively negate its cause of action. Id. Pleadings negating a cause of action may constitute summary judgment evidence " ‘when they contain statements rising to the level of judicially admitting a fact or conclusion which is directly adverse to that party's theory of defense or recovery.’ " Id. at 617. A judicial admission occurs "when a party makes a statement of fact which conclusively disproves a right of recovery or defense he currently asserts." Id. (quoting Khan v. GBAK Props., Inc. , 371 S.W.3d 347, 356–57 (Tex.App.—Houston [1st Dist.] 2012, no pet.) ). To rise to the level of a judicial admission, a statement: (1) must be made in the course of a judicial proceeding; (2) must be made contrary to an essential fact or defense asserted by the same party; (3) must be deliberate, clear, and unequivocal; (4) cannot be destructive of the opposing party's theory of recovery or defense; and (5) enforcing the statement as a judicial admission comports with public policy. Id. " ‘The public policy concerning judicial admissions is that it would be unjust to permit a party to recover after he has sworn himself out of court by a clear, unequivocal statement[,]’ " and self-contradiction should not be allowed as a means of obtaining unfair advantage. Id. (quoting Khan , 371 S.W.3d at 357, and citing Pleasant Glade Assembly of God v. Schubert , 264 S.W.3d 1, 6 (Tex. 2008) ).
Amaro stated from the filing of its Original Petition that Herron had no authority to enter the transaction on its behalf and it referred to the contract in question as a "defective transaction." Amaro submitted a declaration as evidence in response to Lithia's motion for summary judgment stating, "the contract signed by Herron was invalid," "the [Dodge] was traded in ... by Brian Herron without ... approval[,]" and "Brian Herron did not have authority to engage in the transaction." None of Amaro's claims were pled in the alternative.
Amaro's First Amended Petitions states Herron attempted to purchase the Duramax "without the permission of [Amaro]" and calls the deal a "defective transaction" and the contract "fraudulent." Amaro's Response to Motion for Summary Judgment states "Herron had neither title nor authority to trade in the [Dodge]."
An assertion of fact pled in the alternative is not a judicial admission. H2O Sols. , 438 S.W.3d at 617 (citing Holy Cross Church of God in Christ v. Wolf , 44 S.W.3d 562, 568 (Tex. 2001) ).
Amaro's repeated assertions Herron was not acting on its behalf meets the requisites of a judicial admission. These assertions were made in the course of a judicial proceeding; were contrary to its assertion a contract existed; were deliberate, clear, and unequivocal; and were not destructive of any defense raised by Lithia. See id.
Thus, Amaro cannot argue there is a valid contract between the parties as it has judicially admitted Herron was not acting on its behalf when he signed it. See H2O Sols. , 438 S.W.3d at 616. Although Herron may have had actual or apparent authority to bind Amaro contractually, Amaro has stated continually that Herron had no authority to act on its behalf, in both pleadings and in the declaration supporting its response to Lithia's motion for summary judgment. Amaro cannot assert the transaction was defective, claim Herron had no authority to act on its behalf, and argue Herron bound it to a contract Lithia breached. Either Herron acted on Amaro's behalf and contractually bound it to the purchase of the Duramax, or Herron did not have the authority to bind Amaro and Amaro cannot recover for breach. See Ledesma v. City of Houston , 623 S.W.3d 840, 850 (Tex.App.—Houston [1st Dist.] 2020, pet. denied) (holding a party's judicial admission an employee was acting within the scope of employment bars that party from later disputing the employee was acting within the scope of employment); Kahn, Litwin, Renza & Co., Ltd. v. EarthLink Bus., LLC. , No. 16-11126-NMG, 2018 WL 11219452, at *2 (D. Mass. Oct. 15, 2018) (memo & order)("Either there was a contract that was allegedly breached or there was no contract and therefore no breach.").
Because of Amaro's judicial admission that Herron was not authorized to act on its behalf, Amaro cannot establish a claim for breach of contract. No-evidence summary judgment on the breach of contract claim was proper. Issue Two as to breach of contract is overruled.
We need not address the parties’ arguments as to the claim's remaining elements of breach of contract. See Tex.R.Civ.P. 166a(i) (trial court must grant the no-evidence motion when there is no evidence of one or more essential elements of a claim on which party carries the burden of proof).
DTPA
Lithia argued that Amaro could not produce evidence on any of these essential elements of its claims under the Deceptive Trade Practices Act, citing Sections 17.41 - 17.63 of the Texas Business and Commerce Code and Amstadt v. U.S. Brass Corp. , 919 S.W.2d 644, 649 (Tex. 1996) :
1. The plaintiff is a consumer.
2. The defendant can be sued under the DTPA by Plaintiff for this transaction.
3. The defendant committed one or more of the following wrongful acts:
(1) a false, misleading, or deceptive act or practice that is specifically enumerated in the ‘laundry list’ found in Texas Business & Commerce Code § 17.46(b) and that was relied on by the plaintiff to the plaintiff's detriment;
(2) a breach of an express or implied warranty;
(3) any unconscionable action or course of action;
(4) the use or employment of an act or practice in violation of Texas Insurance Code chapter 541; or
(5) a violation of one of the ‘tie-in’ consumer statutes, as authorized by Texas Business & Commerce Code § 17.50(h), which are classified as ‘false, misleading, or deceptive acts or practices.’
To defeat this no-evidence motion, Amaro first urged it was a consumer.
The DTPA defines a consumer as "an individual ... [or] corporation ... who seeks or acquires by purchase or lease, any goods or services[.]" TEX.BUS. & COM.CODE ANN. § 17.45(4). A plaintiff must establish that it was a consumer to sustain a claim under the DTPA. Serv. Corp. Intern. v. Aragon , 268 S.W.3d 112, 117 (Tex.App.—Eastland 2008, pet. denied) (citing TEX.BUS. & COM.CODE ANN. § 17.50 ). Privity to a contract is not a requirement to be a consumer; rather, a plaintiff's consumer status is established by his or her relationship to the transaction. Id. (citing Amstadt v. U.S. Brass Corp. , 919 S.W.2d 644, 649 (Tex. 1996) and Lukasik v. San Antonio Blue Haven Pools, Inc. , 21 S.W.3d 394, 401 (Tex.App.—San Antonio 2000, no pet.) ).
In response to Lithia's motion for summary judgment, Amaro stated, "Plainly, [Amaro] is a duly-incorporated corporate entity in the State of Texas who acquired goods from [Lithia]; no one challenges this fact." This conclusory statement does not establish Amaro acquired any goods from Lithia by purchase or lease. Conversely, Amaro consistently urged the person who presented payment to Lithia and left Lithia's dealership with the Duramax was Brian Herron. Although a DTPA consumer need not be the one who purchases the goods, the transaction must have been required by or for the benefit of the third party and the goods must have been purchased for the third party who seeks consumer status. El Pescador Church, Inc. v. Ferrero , 594 S.W.3d 645, 660 (Tex.App.—El Paso 2019, no pet.). Even though Herron presented a check from Amaro and signed a power of attorney purportedly acting on behalf of the company, Amaro judicially admitted Herron did not have authority to act on its behalf. Although Amaro's evidence established at some point it came into possession of the Duramax, it made no claim Herron purchased the Duramax at its direction or for its benefit. It presented no evidence explaining how, from whom, or under what circumstances it acquired the Duramax after Herron left the dealership with it.
Amaro did not establish it was a consumer. Because Amaro did not produce evidence as to the first essential element of its DTPA claim, the trial court properly granted no-evidence summary judgment on this claim. See TEX.R.CIV.P. 166a(i). Issue Two as to the DTPA claim is overruled.
Common Law Fraud
Lithia argued in its motion for summary judgment Amaro could not produce any evidence on the following essential elements of common-law fraud, citing In re Int'l Profit Assocs., Inc. , 274 S.W.3d 672, 678 (Tex. 2009)(orig. proceeding) (per curiam):
1. The defendant made a representation to the plaintiff.
2. The representation was material.
3. The representation was false.
4. When the defendant made the representation, the defendant
(1) knew the representation was false; or
(2) made the representation recklessly, as p position [sic] assertion,
and without knowledge of its truth.
5. The defendant made the representation with the intent that the plaintiff act on it.
6. The plaintiff relied on the representation.
7. The representation caused the plaintiff injury.
The elements of common-law fraud are: (1) a material representation was made; (2) the representation was false; (3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion; (4) the speaker made the representation with the intent that the other party should act upon it; (5) the other party did act upon it; and (6) the other party suffered injury as a result. Villanova v. Federal Deposit Ins. Corp. , 511 S.W.3d 88, 98 (Tex.App.—El Paso 2014, no pet.) ; Kaheel Props., LLC v. Azteca Entertainment Enters., Inc. , 2018 WL 2976357, *3 (Tex.App.—Eastland June 14, 2018, no pet.)(mem. op.).
In response to Lithia's no-evidence motion, Amaro argued Lithia made "several representations" regarding Amaro's attempts to recover the Dodge Specifically, Amaro argued Lithia committed fraud by representing to an Amaro employee 1) Lithia could not recover the Dodge from a downstream purchaser, and 2) the sale of the Duramax could not be concluded without renegotiating the terms of the sale of the Dodge. More generally, Amaro argued Lithia made representations regarding the location and condition of the Dodge. We find Amaro fails to produce a scintilla of evidence to rebut Lithia's no-evidence summary judgment motion.
In the trial court, Amaro failed to produce any evidence to support their allegation Lithia made the representation Lithia could not recover the Dodge from a downstream purchaser. In response to Lithia's no-evidence motion for summary judgment, Amaro pointed to the wholesale sell order purportedly selling the Dodge to a downstream purchaser, Rising Star. However, our review of that document does not support Amaro's claim Lithia represented it could not obtain the Dodge from a downstream purchaser. Further, Amaro asserts Lithia's response to Amaro's DTPA demand letter as evidence of this representation. However, our review of Lithia's response letter does not support Amaro's allegation that specific representation was made. Amaro's summary judgment response, which includes Kelly Robinson's declaration and numerous exhibits, do not demonstrate this specific representation was ever made to Amaro. Amaro has failed to produce any evidence Lithia ever made this representation.
Regarding the next alleged representation, Amaro asserts Lithia told an Amaro employee the deal was not complete and had to be re-signed. Indulging every reasonable inference in favor of Amaro, we determine this statement, included in Lithia's response to Amaro's DTPA demand letter, met Amaro's burden of presenting more than a scintilla of evidence. See MEI Camp Springs , 623 S.W.3d at 91. However, turning to the element of a false representation, Amaro presented no evidence this representation was false. Amaro merely alleged the statement was false and Lithia knew it to be false is a reasonable inference from the course of the proceedings. To the contrary, however, Kelly Robinson's declaration indicates Amaro adopted Lithia's assertion about the deal being incomplete, when it states, "[T]he paperwork was not correct, and the contract signed by Herron was invalid." None of the remainder of Robinson's declaration nor the exhibits submitted by Amaro present evidence contradicting Lithia's statement the deal was incomplete and had to be re-signed. Regarding this representation, Amaro failed to present more than a scintilla of evidence that it was false.
This alleged misrepresentation was recounted in Lithia's response to Amaro's DTPA demand letter, in which Lithia stated, "[Herron] signed all of the paperwork and we processed the deal and sent it to Wells Fargo. The bank rejected it due to the Gap insurance .... [W]e informed [an unidentified female Amaro employee] we would have to resign without the Gap insurance in order to complete the deal."
Amaro's summary judgment evidence regarding the location and condition of the Dodge indicates Herron surrendered it to Lithia on August 22, 2015, as a trade-in for the Duramax. At the end of September, Lithia sold the Dodge to Rising Star. In November, Amaro requested return of the Dodge. In early December, Olibas and Robinson agreed Lithia would accept the return of the Duramax, with upgrades, in exchange for the Dodge. In addition, Olibas told Robinson he would see if the $10,000.00 down payment could be refunded. In mid-December, Olibas told Robinson the Dodge had been sent to auction and Lithia was in the process of attempting to obtain it. Once Lithia received the Dodge, Lithia would deliver it to Amaro, then retrieve the Duramax while the $10,000.00 would be deducted from the depreciation of the Duramax. Robinson responded the Duramax had $14,000.00 in upgrades. In February 2016, Robinson learned the Dodge was in El Paso and inoperable. Olibas told Robinson it had a transmission problem. Robinson was told Lithia was in the process of shipping the Dodge back to Midland. In May 2016, Lithia repossessed the Duramax but did not return the Dodge.
Amaro broadly alleged in its response to Lithia's motion for summary judgment that Lithia made representations regarding the location and condition of the Dodge with the intent that Amaro rely on them. In addition to these broad assertions made in the trial court, on appeal, Amaro points to additional specific alleged statements made by Lithia which Robinson alleges to be false. Amaro cites a representation by Mr. Olibas, an employee of Lithia, that Lithia had sent the Dodge to auction but was in the process of retrieving it. Without arguing this representation to be false, Amaro alleges this representation never occurred. Amaro, through citation to case law, asserts because it did not occur, representations regarding the location and condition of the Dodge were made with knowledge of its falsity. However, our review of the record shows Amaro did not present any summary judgment evidence that Lithia's representations concerning the location or condition of the Dodge were false.
The final representation alleged by Amaro is another statement by Olibas. Robinson's declaration states Olibas represented Lithia would deduct the $10,000.00 down payment from the depreciation of the Duramax when Lithia repossessed the Duramax. As with the previous statement by Olibas, Amaro again urges on appeal that since this representation did not occur, it may have been made with knowledge of its falsity. Although Amaro argues on appeal it relied on Olibas's statement the $10,000.00 would be credited to them, Robinson's declaration outlines Amaro's response to Olibas at this point was the Duramax had $14,000.00 worth of upgrades. Robinson's declaration does not establish reliance on Olibas's statement; rather, it indicates ongoing negotiations of the terms of attempted recission of the sale.
Having considered all the evidence Amaro submitted in response to Lithia's motion for summary judgment in the light most favorable to Amaro, we find Amaro did not produce more than a scintilla of evidence on every element of common-law fraud. A no-evidence summary judgment was proper on this claim. Therefore, we do not reach the remaining elements of common law fraud regarding this alleged representation. See TEX.R.CIV.P. 166a(i) ; King Ranch, Inc. , 118 S.W.3d at 751. Issue Two as to the common law fraud claim is overruled.
Lithia's Traditional Motion for Summary Judgment
Lithia moved for traditional summary judgment on Brian Herron's actual authority. Lithia argues all Amaro's claims fail as a matter of law due to Brian Herron's actual authority in the purchase of the Duramax. Lithia also moved for traditional summary judgment on the application of the economic loss rule, claiming that rule bars Amaro from any tort remedies because any duties owed are contained in the motor vehicle contract.
As to Herron's actual authority, we have determined Amaro judicially admitted Herron did not act on its behalf, thus precluding its claims for breach of contract and DTPA violations. Amaro's claims for common law fraud fail under the no-evidence standard because it failed to produce more than a scintilla of evidence that any of the alleged statements were false. We therefore need not address the issue of whether traditional summary judgment was proper. See Salazar v. Ramos , 361 S.W.3d 739, 745 (Tex.App.-El Paso 2012) ; TEX.R.CIV.P. 166a(c) & (d). Issue One is overruled.
CONCLUSION
Having overruled all of Appellant's issues, we affirm the trial court's grant of summary judgment.