Opinion
NUMBER 13-19-00143-CV
01-28-2021
POPPINGFUN, INC., Appellant, v. INTEGRACION DE MARCAS, S.A. DE C.V., Appellee.
On appeal from the 131st District Court of Bexar County, Texas.
MEMORANDUM OPINION
Before Justices Benavides, Longoria, and Tijerina
Memorandum Opinion by Justice Longoria
Appellant Poppingfun, Inc. appeals from the trial court's granting of summary judgment in favor of appellee, Integracion de Marcas, S.A. de C.V. By six issues, appellant argues that the trial court erred by: (1 and 6) granting summary judgment; (2) concluding that appellant breached the contract; (3) misinterpreting or misapplying the Uniform Commercial Code (UCC); and (4 and 5) holding appellant liable for the damage to the shipped goods. We reverse and remand.
This appeal was transferred to this Court from the Fourth Court of Appeals by order of the Texas Supreme Court. See TEX. GOV'T CODE ANN. § 22.220(a) (delineating the jurisdiction of appellate courts); id. § 73.001 (granting the supreme court the authority to transfer cases from one court of appeals to another at any time that there is "good cause" for the transfer).
I. BACKGROUND
Appellant is a company based in Wisconsin that makes "popping crystals that give consumers a popping sensation when they are added to food products." Appellee, a Mexican company, ordered samples of appellant's product in February 2018 to be shipped to appellee in San Antonio, Texas. Subsequently, based on the samples, appellee ordered 500,000 pouches of popping crystals from appellant in May 2018. Appellee paid $62,500 for the popping crystals and $1,000 for shipment. The invoice specified that shipping was from appellant's company to Elgin, Illinois via courier.
Appellant arranged for delivery from its manufacturing plant in Wisconsin to a facility in Illinois. The popping crystals arrived in Illinois in June 2018. In July 2018, appellee arranged for the popping crystals to be shipped from Illinois to Mexico, "through San Antonio and Laredo, Texas." The shipment arrived in Mexico in early August 2018, and appellee alleges that the boxes containing the popping crystals were "swollen or inflated and, when opened, contained just powdered sugar with no popping effect or, in a few cases, greatly reduced popping effect." The labels stated, "[s]tability of product is excellent when stored at room temperature (<85°F) in original sealed container." Appellee alleges that this was the first notice it received regarding the temperature sensitivity of the product.
As a result of the damaged product, appellee sued appellant for breach of contract and negligence, asserting that appellant should have notified appellee of the product's temperature sensitivity so that appropriate shipping measures could have been taken. Appellant answered denying subject matter jurisdiction and personal jurisdiction, and challenged venue. Appellee moved for summary judgment against appellant on its breach of contract claim attaching a declaration of David A. Musi, appellee's "Mexico director and sole administrator," and an affidavit of David Lopez, appellee's attorney. Appellant filed an untimely response to the summary judgment motion, to which appellee objected. The trial court sustained appellee's objections and did not consider the response. After conducting a hearing, the trial court granted appellee's summary judgment motion and entered a final summary judgment disposing of all claims, awarding appellee $69,669.87 in damages and $17,545.00 in attorney's fees, plus court costs and interest. This appeal ensued.
II. SUMMARY JUDGMENT
A. Standard of Review & Applicable Law
In a traditional motion for summary judgment, if the movant's motion and summary-judgment evidence facially establish its right to judgment as a matter of law, the burden shifts to the nonmovant to raise a genuine, material fact issue sufficient to defeat summary judgment. M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000). In our de novo review of a trial court's summary judgment, we consider all the evidence in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could and disregarding contrary evidence unless reasonable jurors could not. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006). The evidence raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their conclusions in light of all of the summary judgment evidence. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007). When, as in this case, the order granting summary judgment does not specify the grounds upon which the trial court relied, we must affirm the summary judgment if any of the independent summary judgment grounds is meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000).
As the party moving for traditional summary judgment, appellee had the burden to submit sufficient evidence that established on its face that "there is no genuine issue as to any material fact" and that it is "entitled to judgment as a matter of law." TEX. R. CIV. P. 166a(c), see Broussard v. Moon, 431 S.W.2d 534, 536-37 (Tex. 1968). When a movant meets that burden of establishing each element of the claim or defense on which it seeks summary judgment, the burden then shifts to the non-movant to disprove or raise an issue of fact as to at least one of those elements. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678-79 (Tex. 1979) (discussing evolution and purpose of shifting burdens in summary judgment practice). But if the movant does not satisfy its initial burden, the burden does not shift, and the non-movant need not respond or present any evidence. See id.; State v. Ninety Thousand Two Hundred Thirty-Five Dollars and No Cents in U.S. Currency ($90,235), 390 S.W.3d 289, 292 (Tex. 2013). This is because "summary judgments must stand or fall on their own merits, and the non-movant's failure to answer or respond cannot supply by default the summary judgment proof necessary to establish the movant's right" to judgment. Amedisys, Inc. v. Kingwood Home Health Care, LLC, 437 S.W.3d 507, 511-12 (Tex. 2014) (citing McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 343 (Tex. 1993)); Clear Creek Basin, 589 S.W.2d at 678.
Thus, a nonmovant who fails to raise any issues in response to a summary judgment motion may still challenge, on appeal, "the legal sufficiency of the grounds presented by the movant." Id. The nonmovant "has no burden to respond to a summary judgment motion unless the movant conclusively establishes its cause of action or defense. The trial court may not grant summary judgment by default because the nonmovant did not respond to the summary judgment motion when the movant's summary judgment proof is legally insufficient." Id. (citing Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222-23 (Tex. 1999)).
In light of appellant's failure to timely respond to the motion for summary judgment, it is restricted on appeal in this case to a review of the legal sufficiency of the evidence. State Bd. of Ins. v. Westland Film Indus., 705 S.W.2d 695, 696 (Tex. 1986); Clear Creek Basin, 589 S.W.2d at 678. "[T]he test for legal sufficiency should be the same for summary judgments, directed verdicts, judgments notwithstanding the verdict, and appellate no-evidence review." City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005). In this case, therefore, appellee had the burden to submit sufficient evidence to support each element of its breach of contract claim. It is not the role of the trial court, at summary judgment, to evaluate the credibility of the affiants or the weight of the summary judgment evidence, but only to determine whether a disputed fact issue exists which should be resolved by the trier of fact. See State v. Durham, 860 S.W.2d 63, 66 (Tex. 1993); see also Palestine Herald-Press Co. v. Zimmer, 257 S.W.3d 504, 508 (Tex. App.—Tyler 2008, pet. denied). Neither the trial court nor the appellate court has the duty to sift through the summary judgment record to see if there are other issues of law or fact that could have been raised by the non-movant but were not. McCord v. Mem'l Med. Ctr. Hosp., 750 S.W.2d 362, 364 (Tex. App.—Corpus Christi-Edinburg 1988, no writ). Because our review is limited to a sufficiency challenge, we must determine whether the evidence presented by appellee was sufficient to prove appellant breached the contract. See Amedisys, 437 S.W.3d at 511-12.
The elements of breach of contract claim are: (1) a valid contract; (2) the plaintiff performed or tendered performance; (3) the defendant breached the contract; and (4) the plaintiff was damaged as a result of the breach. See Richter v. Wagner Oil Co., 90 S.W.3d 890, 898 (Tex. App.—San Antonio 2002, no pet.). The first two prongs are satisfied as the parties do not dispute that there was a contract, nor do they dispute that appellee performed under the contract by furnishing payment for the product. We therefore review whether appellee established as a matter of law the elements of its contract cause of action, beginning with the element appellant primarily challenges—breach. See Amedisys, 437 S.W.3d at 511-12; see also Nguyen v. Fantasias Cafe Inc., No. 01-18-00063-CV, 2018 WL 3849079, at *4 (Tex. App.—Houston [1st Dist.] Aug. 14, 2018, no pet.) (mem. op.).
B. Discussion
In its second issue, appellant argues that the trial court erred in finding that it breached the contract. Cases involving the sale of goods, like this case, are governed by the UCC as adopted in the Texas Business and Commerce Code. See TEX. BUS. & COM. CODE ANN. § 2.102. In its motion, appellee alleged that appellant breached the contract by failing to "seasonably specify to [appellee] that the carbonated crystals were temperature sensitive and needed to be transported in a climate-controlled truck at less than 85° Fahrenheit." See id. Appellee also argues that appellant failed to tender delivery because appellant did not "give [appellee] any notification reasonably necessary to enable [appellee] to take delivery." See id. § 2.503(a) ("Tender of delivery requires that the seller put and hold conforming goods at the buyer's disposition and give the buyer any notification reasonably necessary to enable him to take delivery."). Appellee argued that it was damaged as a result of the breach because the product, as received, was damaged beyond its intended use.
Texas Business and Commerce Code § 2.311 states:
(a) An agreement for sale which is otherwise sufficiently definite (Subsection (c) of Section 2.204) to be a contract is not made invalid by the fact that it leaves particulars of performance to be specified by one of the parties. Any such specification must be made in good faith and within limits set by commercial reasonableness.
(b) Unless otherwise agreed specifications relating to assortment of the goods are at the buyer's option and except as otherwise provided in Subsections (a)(3) and (c) of Section 2.319 specifications or arrangements relating to shipment are at the seller's option.
(c) Where such specification would materially affect the other party's performance but is not seasonably made or where one party's cooperation is necessary to the agreed performance of the other but is not seasonably forthcoming, the other party in addition to all other remedies
TEX. BUS. & COM. CODE ANN. § 2.311.(1) is excused for any resulting delay in his own performance; and
(2) may also either proceed to perform in any reasonable manner or after the time for a material part of his own performance treat the failure to specify or to cooperate as a breach by failure to deliver or accept the goods.
The summary judgment evidence presented by appellee included the declaration of Solis and an affidavit of Lopez. The declaration attached exhibits, including, inter alia, the contract between the parties, the invoice showing appellee paid for the product, communications regarding the damaged product, and a bill of lading. Appellee put forth evidence that appellant never informed appellee of any temperature sensitivity of the product prior to shipment. When the shipment arrived in Mexico, the cartons that the product arrived in contained a temperature sensitivity notice, but appellee argued that at that point it was too late, as the product had already been irreparably damaged.
On appeal, appellant challenges appellee's grounds for summary judgment, arguing that the appellee's summary judgment evidence attempts to impose a non-existent burden on appellant through the UCC. Specifically, appellant argues that appellee's interpretation of the UCC "would cause the risk of loss to remain with the seller after the buyer has taken delivery." Appellant asserts that upon delivery of the goods in Illinois, its duty to appellee under the contract was complete, and therefore, appellant's summary judgment evidence does not establish breach as a matter of law. We agree.
1. Duty Under the Contract
The contract, a one-page invoice, specifically required appellant to deliver the goods to "PF Plant" in Elgin, Illinois. The invoice does not include any terms, conditions, or requirements related to shipment from Illinois to Mexico. Upon appellant's delivery of the goods in Illinois, appellee contracted with third-party shippers to move the product from Illinois to Mexico, confirming that appellee took receipt of the product. "The obligation of the seller is to transfer and deliver and that of the buyer is to accept and pay in accordance with the contract." TEX. BUS. & COM. CODE ANN. § 2.301. The meaning of "delivery" in the context of a sale of goods finds significance in transferring ownership in addition to possession. See id. § 2.401 (stating that seller's title to goods passes to buyer when seller completes his performance with respect to physical delivery of the goods).
Pursuant to the contract, appellant's duty was to deliver the goods to Elgin, Illinois. There is no dispute that this delivery occurred, and thus appellant completed its performance when it physically delivered the goods. See id. Appellee does not contend that the goods were damaged when they arrived in Elgin, Illinois. Appellee, having received the goods pursuant to the contract, then opted to hire a courier to deliver the goods to Mexico; appellant was no longer responsible for the goods and therefore, owed no duty to appellee. See id. Accordingly, we find that appellee did not establish as a matter of law all the elements of its breach of contract cause of action. See Amedisys, 437 S.W.3d at 511-12.
We sustain appellant's second issue.
Because appellant's second issue is dispositive, we need not address its remaining issues. See TEX. R. APP. P. 47.1.
III. CONCLUSION
We reverse the judgment of the trial court and remand the case to the trial court for proceedings consistent with this memorandum opinion.
NORA L. LONGORIA
Justice Delivered and filed on the 28th day of January, 2021.