Opinion
No. 01-09-00428-CV
Opinion issued October 14, 2010.
On Appeal from the 215th District Court Harris County, Texas, Trial Court Case No. 2007-00874.
MEMORANDUM OPINION
The trial court rendered summary judgment for appellee, Patrick Kelley, individually and in his capacity as owner of The Law Offices of Patrick Kelley, dismissing with prejudice the claims of appellant, Sara A. Morton, for (1) breach of contract, (2) breach of fiduciary duty, (3) negligent misrepresentation, (4) fraud, (5) intentional infliction of emotional distress, and (6) promissory estoppel. See TEX. R. CIV. P. 166a. In six issues, Morton argues that the trial court erred in rendering summary judgment on each of her six claims because genuine issues of material fact remained unresolved as to each.
We affirm.
BACKGROUND
Kelley heads a criminal defense firm. In late March 2006, he and another associate of the firm, Julia Jones, interviewed Morton for a position that Kelley was creating to handle his firm's growing workload. Kelley offered Morton a position at the firm on April 26 of that year, and Morton accepted. Over the coming days, Kelley and Morton agreed on a starting salary and a benefits package that would include the provision of health insurance, but the two never signed a written contract. Morton left her previous job and began to work at Kelley's firm on May 16, 2006.
Kelley testified by deposition that he and Jones repeatedly made clear to Morton that she would be responsible to purchase her own insurance coverage and that she could either charge the policy to Kelley's credit card or purchase it with her own funds and present Kelley with regular invoices, after which she would be reimbursed.
Morton testified by deposition that, although Kelley and Jones had told her that they themselves were covered by individual policies, and that they may have "initially" advised her to obtain such a policy as well, they had ultimately asked her to "find a[n insurance] plan the whole group could be on." Morton further testified that she had presented Kelley with various group plans over the course of her 27 days at the firm, but that Kelley had expressed a desire to find out more about the nature of the policies. Additionally, Morton testified that neither Kelley nor Jones had ever told her that she would be required to purchase her own policy. During her three weeks at the firm, Morton never obtained a health insurance policy of any kind.
On June 18, 2006, Morton sustained a serious injury while swinging from a rope. She alleged that she called Kelley and told him that she would attempt to come back that week, but that Kelley encouraged her to rest and to heal fully before returning. When Morton called again later that week, however, Jones told her that she had been replaced. As a consequence of her failure to have obtained health insurance during her employment, Morton personally incurred significant medical expenses.
In 2007, Morton filed suit to recover those medical expenses, alleging that Kelley's oral promise to provide health insurance had required him to ensure that Morton was covered at all times during her employment, and asserting six claims arising from his alleged breach of that obligation. On April 16, 2009, the trial court rendered summary judgment for Kelley on each of Morton's six claims and dismissed the claims with prejudice.
STANDARD OF REVIEW
Kelley moved for summary judgment on each of Morton's claims on both traditional and no-evidence bases. See TEX. R. CIV. P. 166a(c), (i). A no-evidence motion for summary judgment is in essence a directed verdict granted before trial, to which we apply a legal-sufficiency standard of review. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex. 2003). A no-evidence summary judgment motion must be granted if, after an adequate time for discovery, (1) the moving party asserts that there is no evidence of one or more essential elements of a claim or defense on which an adverse party would have the burden of proof at trial and (2) the non-movant fails to produce more than a scintilla of summary judgment evidence raising a genuine issue of material fact on those elements. TEX. R. CIV. P. 166a(i). A party moving for no-evidence summary judgment must specifically state the element or elements of a claim for which there is no evidence. Id.; Green v. Indus. Specialty Contractors, Inc., 1 S.W.3d 126, 130 (Tex. App.-Houston [1st] 1999, no pet.). A no-evidence summary judgment will be sustained when (1) there is a complete absence of evidence of a vital fact, (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a scintilla, or (4) the evidence conclusively establishes the opposite of a vital fact. King Ranch, 118 S.W.3d at 751. We view the evidence in the light most favorable to the non-movant, disregarding all contrary evidence and inferences. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997).
We review a trial court's grant of traditional summary judgment de novo. Provident Life Accident Ins. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003); Bendigo v. City of Houston, 178 S.W.3d 112, 113 (Tex. App.-Houston [1st] 2005, no pet.). The standard of review for a traditional summary judgment motion is threefold: (1) the movant must show that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law; (2) in deciding whether there is a disputed material fact issue precluding summary judgment, the reviewing court must take evidence favorable to the non-movant as true; and (3) the reviewing court must indulge every reasonable inference in favor of the non-movant and resolve any doubts in the non-movant's favor. Fort Worth Osteopathic Hosp. v. Reese, 148 S.W.3d 94, 99 (Tex. 2004) (citing Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985)); see TEX. R. CIV. P. 166a(c).
When, as here, a trial court's order granting summary judgment does not specify the grounds on which the court relied, we must affirm summary judgment if any one of the summary judgment grounds is meritorious. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 157 (Tex. 2004); FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872-73 (Tex. 2000).
DISCUSSION
A. Breach of contract
In her first issue, Morton argues that the trial court erred in rendering summary judgment on her breach of contract claim. Kelley moved for a both traditional and no-evidence summary judgment on Morton's breach of contract claim. Morton asserts that, notwithstanding Kelley's motion for summary judgment, issues of material fact exist regarding her breach of contract claim.
The elements of a breach of contract claim are (1) the existence of a valid contract between plaintiff and defendant, (2) the plaintiff's performance or tender of performance, (3) the defendant's breach of the contract, and (4) the plaintiff's damage as a result of the breach. Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex. App.-Houston [1st] 2002, pet. denied). In his motion for summary judgment, Kelley first controverted the existence of a valid contract. Kelley asserted that, assuming Morton's assertions that she had "permanent" employment with Kelley were true, the contract under which she was employed would be invalid and unenforceable because it violates the statute of frauds. Second, Kelley asserted that even if there was a valid employment contract, there was no breach of that contract because Kelley did not promise to provide her with insurance coverage starting the first day of employment. Rather, he contends, he merely promised to provide Morton with reimbursement for insurance she purchased, and that she chose not to take advantage of that promise when she chose not to purchase insurance for which he could reimburse her. Third, Kelley asserted that there was no breach as a matter of law because even if there was a valid contract, and even if she had a pre-employment expectation of immediate coverage, she began work, and continued working, knowing that her alleged assumption of pre-existing group coverage was not correct. Finally, Kelley alternatively asserted that Morton could produce no evidence to her breach of contract-claim. If any one of these grounds was meritorious, we will affirm the trial court's grant of Kelley's motion. See Joe, 145 S.W.3d at 157.
We conclude that even if there was a valid contract, and even if Morton had a good-fatih and reasonably held pre-employment understanding that Kelley promised he would provide her with group health insurance starting from the first day of her employment, there was no breach because, in this scenario, there is no dispute that Kelley notified Morton of the change in the terms of her employment, and she accepted those terms by continuing to work.
The Texas Supreme Court has noted that even when a valid employment agreement exists, an employer may modify the agreement simply by notifying the employee of the change and the employee's acceptance of the change. See In re Dillard Dep't Stores, Inc., 198 S.W.3d 778, 780 (Tex. 2006). If the employee continues working with knowledge of the changes, even if she continues under protest, then she has accepted the change as a matter of law. See id.
At trial and on appeal, Morton responds to Kelley's assertion by contending that there are genuine issues of fact regarding Kelley's alleged breach. Nevertheless, the record shows that Kelley unequivocally notified Morton of the reimbursement scheme, that Morton acknowledged it, and that Morton then continued working for Kelley. Morton testified during deposition:
Q: Okay. Did you find out — regardless of what you might have thought, did you find out after you went to work there that there was not a group health insurance plan.
[Morton]: Right. . . .
. . . .
Q: The first thing you learned about the insurance was there was no group plan when you went to work there?
[Morton]: Right. They had their separate — their separate ones.
. . . .
Q: Your understanding was Ms. Jones had her own personal insurance that Mr. Kelley was paying for?
[Morton]: Right.
Q: Did there ever come a time when Mr. Kelley told you to do that, arrange for your own insurance and he would pay for it?
[Morton]: If — I can't remember specifically. If there was, that was an idea thrown out at first; and then they wanted the group insurance, to find the insurance for everybody.
Q: I'm sorry. Is your answer, you don't recall whether you had that conversation with Mr. Kelley?
[Morton]: I can't recall one way or the other if that was brought up at the beginning and then it changed into the group insurance or —
Q: Okay. But that's what I'm asking you is not what the possibilities are, but do you recall having a conversation with Mr. Kelley at any time in which he suggested to you that you get your own health insurance and that he would pay for it?
[Morton]: It would have been that I get my own, figure out a plan and then he would pay for it.
Q: Okay. You remember having this discussion?
[Morton]: I can't recall a specific discussion — specifically that one way or another. But whether it was the individual or a group, what I do remember is that — to find the provider and he would pay for it. . . .
(emphasis added).
This testimony demonstrates that after she began working for Kelley, Morton realized that there was no group health insurance coverage, and that, for her to be covered by insurance, the burden was on her to "get [her] own, figure out a plan and then [Kelley] would pay for it."
The record further shows the following testimony:
Q: All right. So you continued to work knowing that you did not have healthcare insurance, right?
[Morton]: Right, because we were in the process of, you know, dealing with all that — all the stuff that we just talked about.
. . . .
Q: Okay. During the time that you were looking for healthcare insurance, did you think you had any healthcare insurance?
[Morton]: I knew I didn't have any healthcare insurance.
Q: Thank you. All right. So —
[Morton]: Otherwise I wouldn't have been looking for it.
Q: You and I have said the same thing. Okay. So did there ever come a time that the firm purchased healthcare insurance, a group health care insurance policy.
[Morton]: For themselves?
Q: For the firm.
[Morton]: Was there a time ever? I don't know.
Q: Okay. How about at any time that you were employed there?
[Morton]: No.
Q: Okay. Did you ever quit because of that?
[Morton]: No.
Q: Ever threaten to quit?
A: No.
Morton's testimony shows that after beginning her employment, she realized that Kelley did not provide group health insurance, but, nevertheless, she chose not to quit her job or to pursue legal remedies for breach of an employment agreement. By continuing to work for Kelley, as a matter of law, Morton accepted the terms of her employment regarding the provision of insurance. See In re Dillard Dep't Stores, Inc., 198 S.W.3d at 780 (holding that employee who refused to sign form acknowledging new arbitration policy, but continued to work, accepted policy as matter of law). Because the record shows that Morton accepted the terms of her employment, that the benefit included in those terms was that Kelley would only reimburse Morton for an insurance policy that she purchased herself, and that Morton chose not to take advantage of that benefit when she chose not to purchase an insurance policy, we conclude Morton has failed to raise a genuine issue of material fact regarding the breach element of her breach of contract claim against Kelley. We, therefore, hold the trial court did not err in rendering summary judgment against Morton on her breach of contract claim against Kelley.
We overrule Morton's first issue.
B. Breach of Fiduciary Duty
In her second issue, Morton argues that the trial court erred in rendering summary judgment on her breach of fiduciary duty claim. Kelley advanced two bases for traditional summary judgment on that claim, asserting that (1) as a matter of law, he owed Morton no fiduciary duty and (2) the evidence conclusively negated the breach element of Morton's claim. Additionally, Kelley moved for no-evidence summary judgment on the basis that Morton's could produce no evidence in support of either of the breach and damage elements of her claim.
The trial court did not state the basis or bases for its rendition of summary judgment, and Morton challenges only one of these possible bases for summary judgment — the ground that Kelley owed her no fiduciary duty. Generally speaking, an appellant must attack all independent bases or grounds that fully support a complained-of ruling or judgment; if an appellant does not do so, then we must affirm the ruling or judgment. Britton v. Tex. Dep't of Criminal Justice, 95 S.W.3d 676, 681 (Tex. App.-Houston [1st] 2002, no pet.); see Walling v. Metcalfe, 863 S.W.2d 56, 58 (Tex. 1993) (holding that appellate court in civil cases normally may not alter erroneous judgment in favor of appellant who does not challenge that error on appeal). If an independent ground fully supports the complained-of ruling or judgment, but the appellant assigns no error to that independent ground, then (1) we must accept the validity of that unchallenged independent ground, see Walling, 863 S.W.2d at 58, and thus (2) any error in the grounds challenged on appeal is harmless because the unchallenged ground fully supports the complained-of ruling or judgment. Britton, 95 S.W.3d at 681. We have applied this rule in the context of summary judgment rulings. See Ellis v. Precision Engine Rebuilders, Inc., 68 S.W.3d 894, 898 (Tex. App.-Houston [1st] 2002, no pet.). Because Morton failed to challenge Kelley's traditional summary judgment argument that the evidence conclusively negated the breach element of Morton's claim as a matter of law, and Kelley's no-evidence summary judgment argument that Morton's could produce no evidence in support of either of the breach and damage elements of her claim, we must accept the validity of these remaining grounds and affirm summary judgment against Morton's breach of fiduciary duty claim. See Britton, 95 S.W.3d at 681.
We overrule Morton's second issue.
C. Negligent Misrepresentation
In her third issue, Morton argues that the trial court erred in rendering summary judgment on her negligent misrepresentation claim. Kelley moved for traditional summary judgment on this claim on two bases: (1) that it pertained to a promise of future conduct, which by operation of law could not form the basis of an action for negligent misrepresentation, and (2) that the claim was barred by the economic-loss doctrine. In support of his motion for no-evidence summary judgment on this claim, Kelley additionally argued that Morton could not produce evidence supporting any of the essential elements of negligent misrepresentation.
In response to Kelley's first stated basis for traditional summary judgment, Morton argued, and maintains on appeal, that her claim was based not on "a promise of future performance but on "a misrepresentation of existing fact: that [Morton's] current job offer — which was accepted — included health benefits." On appeal, however, Morton challenges only those bases that Kelley advanced in support of his motion for traditional summary judgment; she does not challenge any of his stated bases for no-evidence summary judgment, i.e., she does not challenge Kelley contention that Morton could produce no evidence supporting any of the essential elements of her negligent misrepresentation claim. See Swank v. Sverdlin, 121 S.W.3d 785, 802 (Tex. App.-Houston [1st] 2003, pet. denied) ("To prevail on a negligent misrepresentation claim, the plaintiff must demonstrate: (1) the representation was made by a defendant in the course of his business, or in a transaction in which he had a pecuniary interest; (2) the defendant supplied false information for the guidance of others in their business; (3) the defendant did not exercise reasonable care or competence in obtaining or communicating the information; and (4) the plaintiff suffered pecuniary loss by justifiably relying on the representation.") (citing Fed. Land Bank Ass'n v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991)). Consequently, we must accept the unchallenged bases as true. See Britton, 95 S.W.3d at 681.
We overrule Morton's third issue.
D. Fraud
In her fourth issue, Morton argues that the trial court erred in rendering summary judgment on her fraud claim. Kelley's motion for traditional summary judgment on that claim was based on his twin assertions (1) that a claim of fraud pertaining to a promise of future performance requires a showing that the promisor, at the time that the promise was made, had no intention of performing and (2) that the evidence conclusively disproved Morton's allegation that Kelley had had such mal-intent at the time of their agreement. Kelley further moved for no-evidence summary judgment on the basis that Morton could produce no evidence in support of any of the elements required to sustain a fraud action. See Formosa Plastics Corp. USA v. Presidio Engrs. Contractors, Inc., 960 S.W.2d 41, 47-48 (Tex. 1998) ("A fraud cause of action requires `a material misrepresentation, which was false, and which was either known to be false when made or was asserted without knowledge of its truth, which was intended to be acted upon, which was relied upon, and which caused injury.'") (quoting Sears, Roebuck Co. v. Meadows, 877 S.W.2d 281, 282 (Tex. 1994)).
In response, Morton argued that "[Kelley was] not entitled to summary judgment . . . just because [Morton] did not know what was going on in his mind at the time he misrepresented her compensation and benefits" and that "[for] purposes of summary judgment, [Morton] is entitled to the reasonable inference, based on the fact that [Kelley] did not perform his promise . . . [that] he did not intend to perform it at the time the misrepresentation was made."
An action for fraud pertaining to a promise of future performance requires, as relevant here, a showing that the promisor, at the time that the promise was made, had no intention of performing the act. Formosa, 960 S.W.2d at 48. The mere failure to perform under a contract is not sufficient evidence of fraud. Id. Rather, a plaintiff alleging a fraud claim must demonstrate that the defendant, at the time that he or she made the representation, had intent to deceive and had no intent to perform; the evidence presented must be relevant to the promissor's intent at the time that the representation was made. Id. However, "[w]hile a party's intent is determined at the time the party made the representation, it may be inferred from the party's subsequent acts after the representation is made . . . `Slight circumstantial evidence' of fraud, when considered with the breach of promise to perform, is sufficient to support a finding of fraudulent intent." Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 434-35 (Tex. 1986).
In support of his motion for no-evidence summary judgment, Kelley argued that Morton could produce no evidence in support of the intent element of her fraud claim. In response, Morton argued below, and maintains on appeal, (1) that "[t]he issue of intent inherently involves fact issues"; (2) that "[s]ince [she] has no way of knowing what was going on in [Kelley's] mind, the only way to prove his intent is through circumstantial evidence"; and (3) that "[a]lthough non-performance of a promise does not, in and of itself, prove that the Defendant did not intend to perform a future act, non-performance is evidence of intent." Morton cites the following exchange in her deposition testimony "as highlight[ing] the reason why summary judgment is inappropriate on issues of the movant's intent":
Q: Do you have any information that when Mr. Kelley supposedly promised [to provide insurance] that he had no intention of doing it?
[Morton]: What kind of information?
Q: Any person who has told you that, any documents that would show you that, any witness that are going to testify to that?
[Morton]: I don't know.
Q: Okay. Put it another way. If Mr. Kelley testifies I did intend to provide Ms. Morton insurance when I told her that I would get insurance — I'm sorry, when I told her I would pay for her insurance, do you have any information that that's not true?
[Morton]: I don't have anyone that would say that.
Q: Or a document that would show that?
[Morton]: Not like a note that he says I don't intend to do this. But it wasn't there when I got there, so I don't know what he was thinking.
Q: That's what I'm asking. What you've told me so far is that you understood you would have healthcare insurance at about the time or shortly after you started working for the law firm, right?
[Morton]: Not shortly after, at the time I started. That's what I assumed because most jobs do that.
Q: Okay. You assumed that. I understand. When you got there, you found out there isn't insurance available for you at the moment, right?
[Morton]: Right.
Q: Okay. My question is when Mr. Kelley said whatever made you assume that, I understand it turned out not to be the way you assumed. Am I correct about that?
[Morton]: Oh, it turned out to not be the way I assumed.
Q: Okay. But my question is: Do you have any information that Mr. Kelley ever said anything to you about insurance with the intent at the time of not doing what he told you?
[Morton]: I don't have any documents that say that.
Q: How about any witnesses that can testify to that?
[Morton]: I don't know — I don't know because I don't know what he was thinking at the time. I mean, he might if he told some of his friends he planned to not do it. I don't know.
Outside of this exchange, Morton pointed out no evidence pertinent to Kelley's intent at the time of his alleged promise. As we have noted, the mere failure to perform under a contract is not sufficient evidence of fraud. Formosa, 960 S.W.2d at 48. Other than her testimony that the insurance coverage "wasn't there when I got there, so I don't know what he was thinking" and that her healthcare coverage "turned out to not be the way [she had] assumed," Morton pointed out no evidence in response to Kelley's no-evidence motion. The second component of Morton's argument motion — that "[s]ince [she] ha[d] no way of knowing what was going on in [Kelley's] mind, the only way to prove his intent is through circumstantial evidence" — is accurate as a statement of law. See Spoljaric, 708 S.W.2d at 435. But in her response below and her brief on appeal, Morton has cited no such circumstantial evidence. Similarly, her contention that "[a]lthough non-performance of a promise does not, in and of itself, prove that the Defendant did not intend to perform a future act, non-performance is evidence of intent" may be true in some circumstances — when, for example, non-performance is coupled with other circumstances reflecting on the promissor's intent. Here, however, Morton failed to produce any evidence of such circumstances. Because she failed to produce more than a scintilla of evidence supporting the intent element of her fraud claim, the trial court did not err in rendering summary judgment on that claim.
We overrule Morton's fourth issue.
E. Intentional Infliction of Emotional Distress
In her fifth issue, Morton argues that the trial court erred in rendering summary judgment on her claim for intentional infliction of emotional distress. The behavior that she alleged to have been outrageous included Kelley's failure to have provided health insurance; his discharge of Morton following her injury; his failure to have paid her salary during her recovery time; his failure to have informed her that she had been replaced; his threat, in response to Morton's "[attempt] to resolve" the dispute about health insurance, to sue her if she sought relief through litigation; and an incident in which Kelley, after initially having refused to speak to Morton or to meet her personally, had allegedly berated her and told her to leave his office. In his motion for traditional summary judgment on this claim, Kelley asserted (1) that the evidence demonstrated that he had not engaged in the alleged behavior; (2) that, as a matter of law, the alleged conduct had not risen to the level necessary to sustain Morton's action for intentional infliction of emotional distress; (3) that the evidence conclusively demonstrated that Morton had not suffered severe emotional distress; and (4) that Morton's claim was barred by the economic-loss doctrine. In support of his motion for no-evidence summary judgment, Kelley further argued that Morton had failed to produce any evidence substantiating the intent and harm elements of her claim.
On appeal, Morton does not address Kelley's basis for no-evidence summary judgment as to the intent element of her claim. Consequently, we must accept it as true and affirm the rendition of summary judgment as to Morton's claim of intentional infliction of emotional distress. See Britton, 95 S.W.3d at 681.
We overrule Morton's fifth issue.
F. Promissory Estoppel
In her sixth issue, Morton argues that the trial court erred in rendering summary judgment against her on her promissory-estoppel claim. The elements of a promissory estoppel claim are a promise, the promisor foreseeing that the promisee will rely on it, and detrimental reliance by the promisee. See English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983); Sandel v. ATP Oil Gas Corp., 243 S.W.3d 749, 753 (Tex. App.-Houston [14th] 2007, no pet.). To show detrimental reliance, the plaintiff must show that she materially changed her position in reliance on the promise. Sandel, 243 S.W.3d at 753.
Kelley moved for a no-evidence summary judgment on the basis that Morton had produced no evidence that she had relied on "any" promise by Kelley to her detriment. In her response to Kelley's no-evidence motion, Morton asserted "there is ample evidence in the record that Ms. Morton reasonably and justifiably relied on [the promise to provide group health insurance] to her detriment." Contrary to Morton's assertion, we have shown that even if Morton's pre-employment understanding was that Kelley would supply her with group health insurance beginning the first day of her employment, this misconception was corrected by Kelley once Morton began working. Furthermore, Morton accepted any new terms of employment as a matter of law when she continued working for Kelley after learning that Kelley would not supply group health insurance. See In re Dillard Dep't Stores, Inc., 198 S.W.3d at 780. Because Morton understood that Kelley was not providing group health insurance, we conclude she could not have relied on any promise from Kelley regarding his provision of group health insurance. Additionally, the record shows that Morton did not give up health insurance in order to work for Kelley or otherwise detrimentally rely on Kelley's promise to continue to employ her or find a new position for her after she healed because Morton testified that she did not forgo any other employment opportunities in reliance of Kelley's promise of employment. We hold that Morton failed to raise an issue of material fact that controverts Kelley's no-evidence motion for summary judgment, and, therefore, the trial court did not err in rendering summary against Morton on her promissory estoppel claim.
We overrule Morton's sixth issue.
Conclusion
We affirm the judgment of the trial court.