AKB Hendrick, LP v. Musgrave Enterprises, Inc.
380 S.W.3d 221
| Tex. App. | 2012Background
- AKB Hendrick, LP sued Musgrave entities and KL.M. over fraud, breach of contract, tortious interference, and negligent misrepresentation related to the AKB/JP Morgan Contract for Hendrick Ranch.
- AKB entered a May 31, 2007 contract with JP Morgan to purchase the 42,000-acre Hendrick Ranch, with an earnest money deposit and a staged inspection period.
- The AKB/JP Morgan Contract allowed extensions with a nonrefundable $75,000 extension fee per extension; AKB could terminate for a refund of the deposit during the initial period.
- In Nov. 2007, AKB signed the Hendrick Ranch ACA with Musgrave Enterprises, forming a plan for an alternate purchase via the Musgrave Foundation, while AKB would receive $1,000,000 upon a fully executed alternate contract.
- K.L.M. and KP.M. negotiated with AKB, proposing the Musgrave Foundation could purchase the Ranch; AKB delivered a $25,000 payment under the ACA for facilitation.
- JP Morgan did not accept the Musgrave Foundation’s alternate contract; the Musgrave/JP Morgan Contract was later formed, and AKB terminated its AKB/JP Morgan Contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was there an implicit ruling on objections to summary judgment evidence? | AKB argues trial court implicitly ruled on objections. | Musgraves contend no implicit ruling and evidence could defeat liability. | Trial court did not rule on objections; issue deemed not preserved. |
| Fraud and negligent misrepresentation claims were properly disposed? | AKB contends misrepresentations and justifiable reliance exist for fraud and negligent misrepresentation. | Defendants show lack of definite misrepresentation and lack of justifiable reliance. | Summary judgment affirmed; no genuine issue on fraud or negligent misrepresentation. |
| Breach of contract by KL.M./Musgrave entities? | AKB asserts ACA imposed payment of $1,000,000 upon an alternate contract; breach occurred. | No alternate contract, KL.M. not a party to ACA; no breach or damages. | AKB cannot prove breach; contract language not satisfied; judgment for defendants affirmed. |
| Tortious interference with contract established? | AKB claims actions made performance more burdensome, causing loss of contract and opportunities. | No evidence that interference occurred or caused damages beyond existing contract burdens. | No tortious interference; judgment for defendants affirmed. |
| Objections to summary judgment evidence – preservation and impact on ruling? | AKB contends objections preserved impliedly. | Objections not ruled on; no impact on summary judgment outcome. | Court declined to read objections as implicit rulings; issues unaffected. |
Key Cases Cited
- Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323 (Tex. 2011) (fraud elements and reliance standards applied)
- Coastal Bank SSB v. Chase Bank of Tex., N.A., 135 S.W.3d 840 (Tex.App.-Hou. 2004) (reliance in business transactions and red flags)
- Grant Thornton v. Prospect High Income Fund, 314 S.W.3d 913 (Tex. 2010) (red flags and reasonable reliance in investments)
- McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests, 991 S.W.2d 791 (Tex. 1999) (false statement and misrepresentation standards)
- Petras v. Criswell, 248 S.W.3d 471 (Tex. App.-Dallas 2008) (promises regarding future conduct reviewed for intent)
- Airborne Freight Corp. v. C.R. Lee Enters., Inc., 847 S.W.2d 289 (Tex. App.-El Paso 1992) (promises of future conduct actionable only with intent to deceive)