Opinion
No. 04-07-00437-CV
Delivered and Filed April 16, 2008.
Appeal from the 57th Judicial District Court, Bexar County, Texas, Trial Court No. 2007-CI-09425, Honorable Michael Peden, Judge Presiding.
Sitting CATHERINE STONE, Justice, SANDEE BRYAN MARION, Justice, REBECCA SIMMONS, Justice.
MEMORANDUM OPINION
AFFIRMED IN PART; REVERSED IN PART; REMANDED
This is an appeal from summary judgments rendered in favor of appellees. We affirm in part, reverse in part, and remand for further proceedings.
BACKGROUND
In the underlying lawsuit, appellant, Sheila Floyd d/b/a Designs By Sheila ("Floyd"), sued appellees, Roger Festor, Brian Gilroy, and Nakoma Petroleum, L.P. ("Nakoma"). In her suit, Floyd alleged appellees hired her in 2005 to perform design services in connection with decorating their business offices. According to Floyd, Festor and Gilroy represented that she would be paid a sum equal to twenty percent of the project costs as her design fee, and she would be reimbursed for any other expenditures. Floyd contended her work was complete on January 12, 2006; however, appellees refused to pay the payment demanded by Floyd. Floyd then sued appellees on claims of fraud, fraud in the inducement, suit on a sworn account, and breach of contract. Festor and Gilroy each filed no-evidence motions for summary judgment and motions for traditional summary judgment on all of Floyd's claims. Nakoma filed a no-evidence motion for summary judgment and a motion for traditional summary judgment on Floyd's fraud and fraud in the inducement and suit on a sworn account claims. The trial court granted the motions for summary judgment, without stating its grounds, and dismissed all of Floyd's claims against Festor and Gilroy, and dismissed all of Floyd's claims against Nakoma except her breach of contract claim. The trial court severed Floyd's breach of contract claim against Nakoma from her other claims, and this appeal by Floyd ensued.
FRAUD AND FRAUDULENT INDUCEMENT
In their no-evidence motions for summary judgment, Festor, Gilroy, and Nakoma alleged there was no evidence on any of the elements of Floyd's fraud and fraudulent inducement claims. One of the elements of a cause of action for fraud and fraudulent inducement is that the defendant knew his statement was false or he made the statement recklessly without any knowledge of its truth. Haynes v. Beceiro, 219 S.W.3d 24, 27 n. 2 (Tex.App.-San Antonio 2006, pet. denied) (stating elements of fraud); see also Haase v. Glazner, 62 S.W.3d 795, 798-99 (Tex. 2001) (holding that with a fraudulent inducement claim, the elements of fraud must be established). In her petition, Floyd alleged appellees misrepresented to her that she would be paid twenty percent of the project costs as her design fee, and she would be reimbursed for any other expenditures. The only summary judgment evidence adduced by Floyd in support of her contention that this representation was false or made recklessly without any knowledge of its truth was (1) her allegation that Festor and Gilroy's customary practice in their business dealings prior to 2005 was to intentionally refuse to pay fees for services rendered by other service providers; (2) appellees' secretary told Floyd "that Roger [Festor] did not, at this time, have any intentions of paying me my money. . . ."; and (3) when she asked Gilroy why he would not pay her invoice, he responded, "Because . . . I don't want to."
"A promise of future performance constitutes an actionable misrepresentation if the promise was made with no intention of performing at the time it was made." Formosa Plastics Corp. USA v. Presidio Eng'rs and Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998). "However, the mere failure to perform a contract is not evidence of fraud." Id. Floyd had to present evidence that Festor and Gilroy, individually and as agents of Nakoma, made the representations with the intent to deceive and with no intention of performing as represented. Id. The evidence presented must be relevant to appellees' intent at the time the representation was made. Id. (emphasis added). We conclude Floyd did not meet her burden of producing summary judgment evidence raising a genuine issue of material fact on the challenged element of her fraud and fraudulent inducement claims because her summary judgment evidence was not pertinent to appellees' intent at the time the representation to pay her was made. Therefore, the trial court did not err in granting Festor's, Gilroy's, and Nakoma's no-evidence motions for summary judgment on Floyd's fraud and fraudulent inducement claims. Because we affirm the no-evidence summary judgment rendered on these claims, we do not address Floyd's issues as they relate to appellees' motions for traditional summary judgment on these same claims.
CONTRACT CLAIMS
In their no-evidence motions for summary judgment, Festor and Gilroy alleged there was no evidence of any of the elements of Floyd's breach of contract claim. Festor and Gilroy also alleged there was no evidence of individual responsibility "for any of the causes of action." To defeat their entitlement to a no-evidence summary judgment on her breach of contract claim, Floyd had to adduce more than a scintilla of probative evidence that raised a genuine issue of material fact on each of the following elements: (1) the existence of a valid contract with Festor and Gilroy individually; (2) Floyd performed or tendered performance; (3) Festor and Gilroy breached the contract; and (4) Floyd was damaged as a result of the breach. See Southwell v. Univ. of Incarnate Word, 974 S.W.2d 351, 354-55 (Tex.App.-San Antonio 1998, pet. denied) (listing elements). In her affidavit, Floyd stated she was "asked to perform services to decorate and design the offices of [Gilroy] and [Festor] by Kathy Festor, Festor's wife." Floyd also stated that prior to "performing decorating and design services for Festor and Gilroy . . . at [Festor's] telephone request," she met with both men in October 2005 at Catrina's Store in Boerne, Texas to discuss her services and "the theme of decorating their new offices." Floyd alleged that, at this meeting, Festor told Gilroy, "`Sheila feels like this job will cost us $100,000.00. Her fee is included in that, which will run about 20, so that'd be about $50,000.00 apiece. Are you okay with that?' Gilroy stated to Festor and me, `I don't have a problem with that.'" In her affidavit, Floyd stated, she "understood that each of them accepted [her] offer in their individual capacity" and neither man told her that "Nakoma was the exclusive contracting party." Floyd also stated:
After the October 2005 agreement, Festor told me that he and Gilroy were moving their individual offices out of the older offices on the same floor of the building to make more room and to add a reception area and staff offices for Nakoma, separate from Sonterra Group and Zeppelinn Energy, L.P. Festor and Gilroy referred to their offices as their individual offices and the reception and staff area as Nakoma's offices. I also decorated and designed a reception area for the Sonterra Group and Zeppelinn Energy, L.P. in the adjacent older offices. I understood the services I was performing were for Festor and Gilroy, individually, and for Nakoma, acting through Festor and Gilroy, Nakoma's agents. Moreover, as Festor and Gilroy stated to me in October 2005 . . . when they each individually accepted my offer to provide design and decorating services to each of them, I also understood that they both acted in a representative capacity for Nakoma to design and decorate the Nakoma staff offices.
Finally, Floyd stated she fully performed "the design and decorating services for Festor and Gilroy as promised[,]" neither man objected to her work, and they both approved of her services "by telling [her] their offices looked `beautiful' and that the offices were `great.'" As to her injuries, Floyd attested that "[d]espite my full and complete performance, neither Festor, Gilroy, nor Nakoma have paid . . . any portion of my fee. As a result, I lost $18,985.76." We conclude Floyd met her burden of producing summary judgment evidence raising a genuine issue of material fact on each element of her breach of contract claim against Festor and Gilroy individually. Therefore, the trial court erred in granting Festor's and Gilroy's no-evidence motions for summary judgment on Floyd's breach of contract claim.
Festor and Gilroy also moved for a traditional summary judgment on Floyd's breach of contract claim. They argued they could not be held individually liable for Nakoma's obligations, relying on the Texas Business Organization Code, which provides as follows:
(a) A limited partner is not liable for the obligations of a limited partnership unless:
(1) the limited partner is also a general partner; or
(2) in addition to the exercise of the limited partner's rights and powers as a limited partner, the limited partner participates in the control of the business.
(b) If the limited partner participates in the control of the business, the limited partner is liable only to a person who transacts business with the limited partnership reasonably believing, based on the limited partner's conduct, that the limited partner is a general partner.
Tex. Bus. Orgs. Code Ann. § 153.102 (Vernon 2007).
In their traditional motion, Festor and Gilroy focused their argument entirely on section (a)(1) and (a)(2). However, they provided no summary judgment proof that the obligation to pay Floyd was solely the obligation of the limited partner, Nakoma. Because we conclude a fact issue exists on whether Floyd contracted with only Nakoma or with Nakoma as well as with Festor and Gilroy individually, a similar fact issue exists on what portion of the debt allegedly owed to Floyd constitutes "the obligations of [the] limited partnership." Therefore, the trial court erred in granting Festor's and Gilroy's motions for a traditional summary judgment on Floyd's breach of contract claim.
Lastly, Festor, Gilroy, and Nakoma each filed no-evidence motions for summary judgment asserting there was no evidence on any element of Floyd's suit on a sworn account claim. To defeat their entitlement to a no-evidence summary judgment on this claim, Floyd had to adduce more than a scintilla of probative evidence that raised a genuine issue of material fact on each of the following elements: (1) a sale and delivery of goods or services; (2) the charges on the account are just, i.e., the prices are charged in accordance with an agreement or, in the absence of an agreement, are the usual, customary and reasonable prices for that good or service; and, (3) the amount remains unpaid. Burch v. Hancock, 56 S.W.3d 257, 264 (Tex.App.-Tyler 2001, no pet.) (listing elements). Based on our review of Floyd's petition, and her affidavit and summary judgment evidence, we conclude Floyd met her burden of producing summary judgment evidence raising a genuine issue of material fact on each of these elements. Therefore, the trial court erred in granting Festor's, Gilroy's, and Nakoma's no-evidence motions for summary judgment on Floyd's suit on a sworn account claim. Because a fact issue exists on each element of this claim, we also reverse the traditional summary judgment rendered on this claim.
CONCLUSION
We reverse the summary judgment rendered in favor of Festor and Gilroy on Floyd's breach of contract claim and we reverse the summary judgment rendered in favor of Festor, Gilroy, and Nakoma on Floyd's suit on a sworn account. We affirm the summary judgment in all other respects. We remand this case to the trial court for further proceedings consistent with this opinion.
Although we agree Floyd's breach of contract claim against Festor and Gilroy and Floyd's suit on a sworn account "are so interwoven" with Floyd's breach of contract claim against Nakoma, we do not address appellees' complaint regarding the severance of these claims because appellees did not file a notice of appeal. See Tex. R. App. P. 25.1(c).