Opinion
No. 11-11-00118-CV
03-07-2013
MASSEY OPERATING, LLC, Appellant v. FRAC TECH SERVICES, LLC, Appellee
On Appeal from the 91st District Court
Eastland County, Texas
Trial Court Cause No. CV-08-41050
MEMORANDUM OPINION
This appeal arises from two summary judgment orders. Appellant, Massey Operating, LLC, attacks the summary judgment orders in two issues. We affirm.
Background Facts
Frac Tech Services, LLC, filed a suit on sworn account against Massey Operating on January 8, 2008. The suit arose from oil well stimulation services performed by Frac Tech on a well operated by Massey Operating. Frac Tech sought to recover its charges of $42,677.68 for the well fracturing services it performed. Massey Operating filed a verified denial of the suit on sworn account that included the affirmative defense of fraudulent inducement to Frac Tech's breach of contract claim.
Massey Operating also filed a counterpetition against Frac Tech wherein it sought damages from Frac Tech for the fracture services that were the subject of the suit on sworn account. Specifically, Massey Operating alleged that the fracture procedure performed by Frac Tech damaged the well. Massey Operating asserted causes of action for violations under the Texas Deceptive Trade Practices-Consumer Protection Act, negligent misrepresentation, and common-law fraud.
TEX. BUS. & COM. CODE ANN. §§ 17.41-17.63 (West 2011 & Supp. 2012).
As a plaintiff in its suit on sworn account, Frac Tech filed a no-evidence motion for summary judgment to negate Massey Operating's affirmative defense of fraudulent inducement. Massey Operating filed a response to this no-evidence motion for summary judgment that contained the affidavit of its president. After a hearing, the trial court entered an order granting partial summary judgment on Frac Tech's no-evidence motion for summary judgment. Massey Operating challenges this summary judgment in its second issue on appeal.
As a counter-defendant, Frac Tech additionally filed a combined traditional motion for summary judgment and no-evidence motion for summary judgment in an effort to negate Massey Operating's counterclaims. In its grounds for a traditional motion for summary judgment, Frac Tech asserted that the statute of limitations for Massey Operating's causes of action for negligent misrepresentation and violations of the DTPA had expired prior to the date Massey Operating filed its countersuit. Frac Tech directed its no-evidence motion for summary judgment at Massey Operating's cause of action for common-law fraud. Massey Operating filed a response to the combined motion for summary judgment and no-evidence motion for summary judgment that contained essentially the same affidavit from Massey Operating referenced above. The trial court subsequently entered an "Order Granting Counter-Defendant's Motion for Summary Judgment and No-Evidence Motion for Summary Judgment," granting Frac Tech's motion for summary judgment in all respects on Massey Operating's counterclaims. In its first appellate issue, Massey Operating only challenges the no-evidence portion of this summary judgment order negating its counterclaim for common-law fraud. Accordingly, the trial court's order granting the traditional motion for summary judgment on Massey Operating's claims for negligent misrepresentation and violations of the DTPA on limitations grounds is not at issue in this appeal.
After the entry of the two summary judgment orders, Frac Tech's suit on sworn account against Massey Operating was the only remaining claim between the parties. The parties subsequently executed an "Agreed Final Judgment" that resolved the suit on sworn account. Although it is not expressly stated in the agreed final judgment, the parties apparently agreed that Massey Operating would be permitted to appeal the trial court's summary judgment orders granting Frac Tech's two no-evidence motions for summary judgment because Frac Tech has not alleged that Massey Operating is prevented from doing so under the terms of the agreed final judgment.
Standard of Review
A no-evidence summary judgment motion made pursuant to TEX. R. CIV. P. 166a(i) is essentially a motion for a pretrial directed verdict. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581 (Tex. 2006). Once such a motion is filed, the burden shifts to the nonmoving party to present evidence raising an issue of material fact as to the elements specified in the motion. Tamez, 206 S.W.3d at 582; W. Invs., Inc. v. Urena, 162 S.W.3d 547, 550 (Tex. 2005). We review the summary judgment evidence in the light most favorable to the party against whom the summary judgment was rendered, crediting evidence favorable to that party if reasonable jurors could and disregarding contrary evidence unless reasonable jurors could not. Tamez, 206 S.W.3d at 582; see Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 756 (Tex. 2007); City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). An appellate court reviewing a summary judgment must consider whether reasonable and fair-minded jurors could differ in their conclusions in light of all of the evidence presented. Mayes, 236 S.W.3d at 755; City of Keller, 168 S.W.3d at 827. Pleadings are not competent summary judgment evidence, even if sworn or verified. Laidlaw Waste Sys. (Dallas), Inc. v. City of Wilmer, 904 S.W.2d 656, 660 (Tex. 1995); Zeifman v. Nowlin, 322 S.W.3d 804, 808 (Tex. App.—Austin 2010, no pet.).
Analysis
Massey Operating's two issues on appeal challenge the trial court's determination that it did not present summary judgment evidence to support its counterclaim for common-law fraud and its affirmative defense of fraudulent inducement. To recover on an action for common-law fraud, a plaintiff must show that (1) a material representation was made; (2) it was false; (3) when the speaker made it, he knew it to be false or made it recklessly without any knowledge of its truth and as a positive assertion; (4) he made it with the intention that it should be acted upon by the plaintiff; (5) the plaintiff acted in reliance upon it; and (6) the plaintiff thereby suffered injury. Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 337 (Tex. 2011). As a defensive matter, a contract is subject to avoidance on the ground of fraud. Williams v. Glash, 789 S.W.2d 261, 264 (Tex. 1990). To prevail on the affirmative defense of fraudulent inducement, a party must establish the elements of fraud as they relate to an agreement between the parties. Haase v. Glazner, 62 S.W.3d 795, 798-99 (Tex. 2001); McLernon v. Dynegy, Inc., 347 S.W.3d 315, 328 (Tex. App.—Houston [14th Dist.] 2011, no pet.). Accordingly, the elements of a cause of action for common-law fraud and the elements of the affirmative defense of fraudulent inducement overlap.
Massey Operating's summary judgment evidence consisted of the affidavit of its president, Clifton Joseph Massey, and an authenticated copy of an e-mail from a representative of Frac Tech, Frank Syfan. Massey stated as follows in his affidavit:
In the course of our communication regarding the fracture treatment of the Well, Frank Syfan represented that he was a licensed engineer, that he had degrees in engineering and geology, and that Frac Tech Services, Ltd. had previously and recently performed a successful well fracture treatment of the same type as they proposed to perform on the Massey Operating, LLC well. These representations were material to Massey Operating, LLC's decision to proceed with the services. These representations were false and Frank Syfan knew they were false when he made them, or at least made them with reckless disregard to their untruthful nature. It is evident that Frank Syfan intended these representations to induce Massey Operating, LLC into purchasing services from Frac Tech because they were made during the course of collecting a proposal for the work and coincided with characterizations about previous successes and promises of the same for Massey Operating, LLC. Massey Operating, LLC did ultimately rely on Frank Syfan's representations in its decision to proceed with the fracture treatment, with the results that the work was unsuccessful, additional expenses of approximately $100,000 were incurred trying to salvage the situation, and Frac Tech is now trying to sue Massey Operating for collection of the fees for the fracture treatment.The e-mail from Syfan reads as follows:
Cliff, Attached is our recommendation to frac Stage 1 for the Barnett Shale. This does not have to be set in stone and I would like the opportunity to discuss it with you and Brad if possible. If we all agree, then we can get on your well pretty quickly.
I have talked to Frank Autry our Exec VP and since we are booked up for two months and do not want you to wait on a cancellation, we would propose fracing your well on a Saturday morning if that would be OK with you. We can talk about getting you on the schedule for additional fracs for your additional wells, once we make this one a whopping success!!
BTW, we just successfully fracture treated a Barnett Shale well for a company out of Amarillo IN EASTLAND COUNTY last week, so you are not entirely in virgin territory. Based on our information, I am even more confident that your well will be successful in the Barnett.
Best Regards,
Frank
Frac Tech asserted at trial and on appeal that Massey's affidavit does not constitute competent summary judgment evidence because it is conclusory. We agree. "A conclusory statement is one that does not provide the underlying facts to support the conclusion." Brown v. Brown, 145 S.W.3d 745, 751 (Tex. App.—Dallas 2004, pet. denied) (quoting Choctaw Props., L.L.C. v. Aledo I.S.D., 127 S.W.3d 235, 242 (Tex. App.—Waco 2003, no pet.). Conclusory testimony is not competent summary judgment evidence. Tex. Div.-Tranter, Inc. v. Carrozza, 876 S.W.2d 312, 314 (Tex. 1994). As quoted above, Massey's affidavit is little more than a recitation of the elements of common-law fraud. While Massey recited various representations made by Syfan, there is no summary judgment evidence that the representations were false or material other than Massey's naked assertions that they were false and material. Additionally, there is no competent summary judgment evidence in the form of expert testimony to support Massey Operating's claimed injuries. The well fracturing process is of a highly technical nature that is beyond the general understanding and common knowledge of lay witnesses. Accordingly, expert testimony was required to support the issue of causation with regard to the injuries claimed by Massey Operating. See Palma v. Chribran Co., L.L.C., 327 S.W.3d 866, 870-72 (Tex. App.—Beaumont 2010, no pet.) (holding that lay opinion testimony on underground water movement cannot be considered probative summary judgment evidence to raise a genuine issue of material fact as to causation). Massey Operating's first and second issues are overruled.
This Court's Ruling
The judgment of the trial court is affirmed.
TERRY McCALL
JUSTICE
Panel consists of: Wright, C.J.,
McCall, J., and Willson, J.