Opinion
No. 05-07-00171-CV
Opinion issued June 11, 2008.
On Appeal from the County Court at Law No. 2, Dallas County, Texas, Trial Court Cause No. CC-02-13955-B.
Before Justices MORRIS, WRIGHT, and MOSELEY.
MEMORANDUM OPINION
Southwest Electronics Industries, Inc. d/b/a SEI appeals from a summary judgment granted in favor of Fair-Rite Products Corp. In two issues, SEI contends the trial court erred in: (1) granting Fair-Rite's no-evidence motion for summary judgment because SEI presented evidence sufficient to raise a fact question as to each element of its causes of action; and (2) denying its second motion to compel. We sustain SEI's first issue with respect to its claims for breach of contract, statutory violation, fraud, and quantum meruit. We reverse the trial court's judgment, in part, and remand those claims to the trial court for further proceedings. In all other respects, we affirm the trial court's judgment.
Background
SEI is a sales representative for manufacturers of electronic equipment and components, including magnetic and shielding materials. Fair-Rite is a manufacturer of magnetic and shielding materials. SEI was the exclusive sales representative for Fair-Rite for the states of Arkansas, Oklahoma, and Texas. The parties' agreement set forth the types of commissions and the procedure for their payment.
In the late 1990's, Fair-Rite began to shift its manufacturing offshore. It established three subsidiaries outside of the United States — Fair-Rite Asia, Fair-Rite Europe, and Fair-Rite Mexico. Fair-Rite informed SEI that it would be paid commissions on purchases handled through its foreign subsidiaries that resulted from SEI's efforts within its exclusive territory.
SEI used its best efforts to sell Fair-Rite's products within its exclusive territories. SEI contends that it made many sales of Fair-Rite's products through Fair-Rite Asia. Joseph Stanfield, president of SEI, began to question whether SEI was receiving all commissions due from its sales through Fair-Rite Asia.
SEI filed this lawsuit on November 21, 2002 against Fair-Rite for commissions allegedly owed. SEI asserted claims for breach of contract, violation of the Texas Sales Representative Act, breach of fiduciary duty/constructive fraud, fraud, accounting, specific performance, promissory estoppel, and quantum meruit. It sought damages for the unpaid commissions in the amount of $541,147.78. Fair-Rite filed a no-evidence motion for summary judgment. The trial court granted the motion and this appeal timely followed.
The trial court dismissed with prejudice SEI's claim for breach of fiduciary duty/constructive fraud on March 29, 2005.
Standard of Review
A no-evidence motion for summary judgment places the burden on the non-movant to present summary judgment evidence raising a genuine fact issue. Espalin v. Children's Med. Ctr. of Dallas, 27 S.W.3d 675, 683 (Tex.App.-Dallas 2000, no pet.). We review a no-evidence motion for summary judgment under the same legal sufficiency standard used to review a directed verdict. Gen. Mills Rests., Inc. v. Tex. Wings, Inc., 12 S.W.3d 827, 832-33 (Tex.App.-Dallas 2000, no pet). Thus, we must determine whether the non-movant produced more than a scintilla of probative evidence to raise a fact issue on the material questions presented. Id. at 833.
Initially, we address Fair-Rite's contention that the affidavit submitted by SEI in response to the motion for summary judgment is not competent summary judgment evidence. Specifically, Fair-Rite contends the affidavit of SEI's president, Joseph Stanfield, is conclusory. Fair-Rite objected to Stanfield's affidavit. It did not, however, obtain a ruling on its objections. An affidavit that is conclusory is substantively defective, and the failure to object or obtain a ruling on an objection does not waive the substantive defect. Brown v. Brown, 145 S.W.3d 745, 751 (Tex.App.-Dallas 2004, pet. denied). Conclusory affidavits do not raise fact issues. Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 122 (Tex. 1996); Trejo v. Laredo Nat'l Bank, 185 S.W.3d 43, 50 (Tex.App-San Antonio 2005, no pet.). A conclusory statement is one that does not provide the underlying facts to support the conclusion. Trejo, 185 S.W.3d at 50.
As support for its contention that Stanfield's affidavit is conclusory, Fair-Rite relies upon a case from this Court. Selz v. Friendly Chevrolet, Ltd., 152 S.W.3d 833 (Tex.App.-Dallas 2005, no pet.). Friendly Chevrolet hired Selz as its general manager agreeing to pay both a base salary and a percent of commissions. After Selz was fired, he sued claiming breach of contract. Friendly Chevrolet pleaded the affirmative defense of payment. Id. at 835. It moved for summary judgment and included an affidavit of Friendly's president along with payroll records showing payments to Selz of both his base salary and a percent of commissions. Id. at 835-37. Selz submitted his own affidavit stating that he had not been properly paid for all earned wages and commissions. Id. at 837. His affidavit, however, did not contain any facts to support his conclusion. This Court concluded that his statements were nothing more that "sworn repetitions of the allegations in his pleadings." Id.
Unlike the affidavit in Selz, however, Stanfield's affidavit is supported by facts and documentation. Stanfield provided information about conversations he had regarding the commissions with several Fair-Rite employees. Among the documentation attached to his affidavit were (1) the agreements between Fair-Rite and SEI, (2) e-mails from a Fair-Rite employees assuring Stanfield that the commissions would be paid on the sales processed through Fair-Rite Asia, (3) an uncashed Fair-Rite check to SEI for payment of a portion of commissions due from Fair-Rite Asia sales, and (4) documentation of Fair-Rite Asia sales for which Stanfield contends SEI is owed commissions. Stanfield provided facts and documentation to support his assertions in his affidavit. Accordingly, we conclude that Stanfield's affidavit is competent summary judgment evidence.
1. Breach of Contract
SEI asserted that Fair-Rite breached the parties' written agreements by failing to pay commissions owed to SEI under those agreements. The elements for a breach of a contract claim are: (1) a valid contract; (2) performance or tendered performance; (3) breach of the contract; and (4) damages resulting from the breach. McGraw v. Brown Realty Co., 195 S.W.3d 271, 276 (Tex.App.-Dallas 2006, no pet.).
Fair-Rite moved for summary judgment on SEI's breach of contract claim on the ground that SEI has no evidence that Fair-Rite failed to pay the commissions owed to SEI. In the absence of such evidence, Fair-Rite argued, SEI is unable to establish a breach of contract or any damages.
In its response to Fair-Rite's no-evidence motion for summary judgment, SEI attached excerpts from the deposition of Carole Parker, Fair-Rite's president. Parker admitted that she told Stanfield that SEI was entitled to commissions on Asia sales if it turned in the proper paperwork. Stanfield stated in his affidavit that Parker made repeated oral and written representations that SEI would be paid commissions on sales processed through Fair-Rite Asia. In an e-mail Parker sent to Stanfield on November 11, 2000, she stated that Fair-Rite Asia has "agreed to pay commission to our reps for any product that is sold through FRA [Fair-Rite Asia] that originated in the states." She further stated that this has been the policy for over three or four years. Parker then promised to follow up to make sure that SEI is paid commissions for the Asia sales.
Attached to Stanfield's affidavit were numerous e-mails between himself and Fair-Rite personnel. In these e-mails, Fair-Rite acknowledges problems with getting sales information from Fair-Rite Asia. John Horner, sales manager for Fair-Rite, sent an e-mail to Stanfield on January 17, 2003. In that e-mail, Horner stated that he is working on finding a "functional method of distributing the identifiable sales for Fair-Rite Asia in 2001." Parker sent Stanfield two spreadsheets representing Fair-Rite Asia sales for 2001. She requested that he respond if there are any customers that SEI has worked with in the United States that are manufacturing in Asia but are not listed on the spreadsheets. In response, Stanfield put an asterick next to the customers he believed SEI had a claim to and also informed Parker that there were nine manufacturers that were not on the spreadsheets. Stanfield questioned the completeness of the reports on the Fair-Rite Asia sales several times.
Parker stated in her deposition that she believed SEI was paid commissions for Asia sales in 2001. Fair-Rite did, in fact, tender a check for $5,239.71 to SEI for commissions in 2001. SEI did not cash this check because it did not represent the full amount it said it was owed. Parker also stated in her deposition that she did not believe SEI was paid any commissions for Asia sales in 2002 and 2003. SEI's summary judgment evidence included a letter from Edward Yambao of Compaq Computer Corporation addressed to "Melissa West Fair-Rite Products (c/o Southwest Electronic Industries, Inc.)." This letter confirms an award of business to Fair-Rite Asia. Stanfield stated that he forwarded this letter to Fair-Rite. In the letter, Yamboa thanked SEI for its support in 2001 and stated that Compaq was looking forward to a more prosperous 2002. In its brief, Fair-Rite refers to this letter as coming from a customer.
We conclude SEI's summary judgment evidence constitutes more than a scintilla of evidence as to whether Fair-Rite has failed to pay commissions owed to SEI. Thus, the trial court erred in granting Fair-Rite's no-evidence motion for summary judgment on SEI's breach of contract claim.
2. Statutory Violation
SEI asserted that Fair-Rite violated the business and commerce code by failing to pay commissions in accordance with their agreement. A contract between a manufacturer and sales representative under which the sales representative is to solicit orders must be in writing and set forth the method by which the sales representative's commission is to be computed and paid. Tex. Bus. Com. Code Ann. § 35.82 (Vernon 2002). A manufacturer who fails to pay a commission as provided for in the contract is liable to the sales representative in a civil action for three times the unpaid commission plus reasonable attorney's fees. Tex. Bus. Com. Code Ann. § 35.84 (Vernon 2002).
Fair-Rite moved for summary judgment on this claim on the ground that there was no evidence that it failed to pay commissions owed to SEI. In our discussion of SEI's breach of contract claim, we conclude there is sufficient evidence to raise a fact issue as to whether Fair-Rite failed to pay commissions. Accordingly, this same evidence is sufficient to defeat Fair-Rite's no-evidence motion for summary judgment on SEI's statutory violation claim.
3. Accounting and Specific Performance
SEI sought an accounting to determine the exact nature and the extent of sales upon which commissions are due. SEI also asserted a claim of specific performance to compel Fair-Rite's compliance with the contractual provision requiring it to provide SEI with a list of all shipments made. Specific performance is not a separate cause of action, but rather it is an equitable remedy used as a substitute for monetary damages when such damages would not be adequate. See Scott v. Sebree, 986 S.W.2d 364, 368 (Tex.App.-Austin 1999, pet. denied).
Fair-Rite moved for summary judgment on SEI's claim for an accounting on the ground that SEI failed to establish that it could not obtain the information through normal discovery and that SEI actually has documentation detailing all of Fair-Rite's sales transactions. As to SEI's claim of specific performance, Fair-Rite asserted the claim is moot because SEI has obtained the information through discovery. In Stanfield's affidavit attached to SEI's initial response to Fair-Rite's motion, he stated that he did "not have a complete record of all of Fair-Rite Asia sales between November 1998 and May 2003." However, in its supplemental response to Fair-Rite's no-evidence motion for summary judgment, SEI states that "Fair-Rite has finally produced documents that enable SEI to calculate the commissions it is owed." This admission by SEI indicates that it has acquired the information sought. Moreover, in the affidavit attached to the supplemental response, the assertion of not having a complete record of sales is omitted. For these reasons, we conclude that SEI's claims for an accounting and specific performance are moot. Addressing SEI's issues with respect to these two claims would result in an improper advisory opinion. See Camarena v. Texas Employment Comm'n, 754 S.W.2d 149, 151 (Tex. 1988) (mootness doctrine mandates that courts avoid rendering advisory opinion by deciding only issues that present actual controversy at time of decision). Accordingly, we conclude the trial court did not err in granting summary judgment on these claims.
4. Fraud
SEI alleged two counts of fraud. First, it alleged that Parker represented that SEI would be paid commissions on the sales of Fair-Rite's foreign subsidiaries and that she would follow up and make sure those payments were made. Second, SEI alleged that Fair-Rite misrepresented the amount of its sales.
To prevail on a fraud claim, the plaintiff must prove that: (1) a material representation was made; (2) the representation was false; (3) when the speaker made the representation, he knew it was false or made it recklessly without knowledge of the truth as a positive assertion; (4) the speaker made it with the intention that it should be acted upon by the party; (5) the party acted in reliance upon it; and (6) the party thereby suffered injury. Johnson Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 524 (Tex. 1998).
Fair-Rite sought summary judgment on SEI's first fraud claim on the grounds that there is no evidence: (1) of the promise to pay or evidence that Parker did not follow up on the matter; (2) that Fair-Rite intended to induce SEI to act; (3) that SEI relied on the promise; (4) that Fair-Rite did not pay all commissions due to SEI; and (5) that SEI suffered any injury. In its response, SEI included an e-mail from Parker to Stanfield stating that Fair-Rite Asia will pay commissions for products sold through Fair-Rite Asia that originated in the states. Stanfield stated in his affidavit that Parker also made numerous oral representations that these commissions would be paid. Relying upon these representations, Stanfield testified that SEI aggressively sought out Asia business within its exclusive territory. Parker also promised to follow up and make sure the commissions were paid. Stanfield stated in his affidavit that Parker did not provide any proof that she was attempting to acquire information from Fair-Rite Asia regarding its sales involving SEI's sales efforts. He further stated that he realized in early 2002 that Fair-Rite had no intention of paying the commissions owed for SEI's Fair-Rite Asia sales. Parker stopped talking with him at the end of 2002. We have already concluded that SEI presented more than a scintilla of evidence to raise a fact question as to whether Fair-Rite has paid all commissions due. Because there is a fact question as to full payment of commissions, a fact question exists as well with respect to damages suffered by SEI. We conclude, there is more than a scintilla of evidence with respect to each element of SEI's first fraud claim. Accordingly, the trial court erred in granting Fair-Rite's no-evidence motion for summary judgment on SEI's first fraud cause of action.
As to SEI's second count of fraud, SEI alleged that Fair-Rite misrepresented the amount of its sales. Fair-Rite asserted that there was no evidence of a misrepresentation that Fair-Rite knew was false and no evidence that Fair-Rite intended for SEI to rely on the misrepresentation and that it did in fact rely upon it to its detriment. In his affidavit, Stanfield testified that Fair-Rite repeatedly promised to provide a complete list of sales of Fair-Rite Asia. Fair-Rite employees made repeated representations that it was working on acquiring this information. Stanfield relied upon these representations. He finally came to believe that Fair-Rite never intended to provide this information. This evidence is sufficient to defeat Fair-Rite's no-evidence motion for summary judgment with respect to this claim of fraud.
5. Promissory Estoppel
In its sixth amended petition, SEI alleges in the alternative promissory estoppel. Specifically, SEI alleged that Fair-Rite promised to disclose all sales transactions and to pay commissions thereon.
The elements of promissory estoppel are: (1) a promise; (2) foreseeability of reliance thereon by the promisor; and (3) substantial reliance by the promisee to his detriment. English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983). In its motion for summary judgment, Fair-Rite alleged that SEI had no evidence that it promised to disclose to SEI all of its sales transactions, that it failed to pay SEI all money due, that SEI relied on such promise, or that its reliance was reasonably foreseeable to Fair-Rite. In its petition, SEI claimed that Fair-Rite promised to disclose all sales transactions between itself and Fair-Rite, including Fair-Rite's subsidiaries, and to pay commissions thereon. However, in both its response to Fair-Rite's no-evidence motion for summary judgment and its appellate brief, SEI points only to evidence of Fair-Rite's promise to pay commissions on Fair-Rite Asia sales. We agree with Fair-Rite that SEI did not produce any evidence to support its contention that Fair-Rite promised to disclose all of its sales transactions. Accordingly, the trial court did not err in granting summary judgment on SEI's allegation of promissory estoppel.
6. Quantum Meruit
SEI also alleged quantum meruit as an alternative claim. SEI alleged that it provided valuable services to Fair-Rite from which Fair-Rite benefitted.
Quantum meruit is an equitable remedy that does not arise out of a contract, but is independent of it. Vortt Exploration Co. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990). Generally, a party may recover under quantum meruit only if no express contract covering the services or materials furnished exists. Id. A party can recover in quantum meruit when non-payment for the services rendered would result in an unjust enrichment to the party benefited by the work. Id. at 944. To recover under quantum meruit a claimant must prove that: (1) valuable services were rendered or materials furnished; (2) for the person sought to be charged; (3) which services and materials were accepted by the person sought to be charged, used and enjoyed by him; (4) under such circumstances as reasonably notified the person sought to be charged that the plaintiff in performing such services was expecting to be paid by the person sought to be charged. Id.; Heldenfels Bros. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992).
Fair-Rite moved for summary judgment on SEI's quantum meruit claim on the grounds that SEI had no evidence that it rendered services to Fair-Rite for which it was not compensated and no evidence that it reasonably expected to be paid but was not paid by Fair-Rite. As discussed above, SEI presented evidence sufficient to raise a fact question as to whether Fair-Rite failed to pay SEI all commissions due and that SEI reasonably expected to be paid. Accordingly, the trial court erred in granting Fair-Rite's no-evidence motion for summary judgment on SEI's claim for quantum meruit. We sustain SEI's first issue with respect to its claims for breach of contract, statutory violation, fraud, and quantum meruit. We overrule SEI's first issue with respect to its claims of accounting, specific performance, and promissory estoppel.
SEI'S Second Motion to Compel
In its second issue, SEI contends the trial court erred in denying it second motion to compel. Both parties acknowledge in the appellate briefs that the trial court conducted a hearing on SEI's second motion to compel. The record before this Court, however, does not contain a reporter's record from this hearing. Our records do contain a letter from the court reporter stating that she could not prepare reporter's records for the requested hearings because none of the hearings in the case had been recorded. The absence of a reporter's record from the hearing on a motion to compel prevents us from reviewing the complaint. See In re Pilgrim's Pride Corp., 187 S.W.3d 197, 199 (Tex.App.-Texarkana 2006, orig. proceeding); see also Bielamowicz v. Cedar Hill Ind. Sch. Dist., 136 S.W.3d 718, 722 (Tex.App.-Dallas 2004, pet. denied) (nothing for court to review in absence of a reporter's record from hearing on motion to show authority). Accordingly, we overrule SEI's second issue.
Conclusion
We reverse the trial court's judgment, in part, and affirm, in part. We reverse the trial court's summary judgment on SEI's claims for breach of contract, statutory violation, fraud, and quantum meruit and remand those claims to the trial court. In all other respects, we affirm the trial court's judgment.