400 S.W.3d 156
Tex. App.2013Background
- Gold’s Gym sued GGNYC 2, Inc., Tan, Chad, Brewer, the Jerry and Kay Brewer Revocable Trust, and GGNYC Holdings after termination of the 2008 Franchise Agreement, asserting claims including breach of the franchise agreements and related guaranties, unjust enrichment, misrepresentation, and fraud.
- The 2005 Franchise Agreement and the 2005 Guaranty involved Brewer, Chad, and Tan; Brewer contends his signature on the 2005 Guaranty was forged.
- The 2008 Franchise Agreement replaced the 2005 Agreement; its Exhibit B included the 2008 Guaranty signed by Tan, Chad, Max Pierre, and the Trust, with Brewer’s signature purportedly as trustee, which Brewer likewise contends was forged.
- Brewer and the Trust answered with verified denials and pleaded forgery as well as other defenses, including ratification by conduct.
- The trial court granted a take-nothing summary judgment in favor of Brewer and the Trust on most claims, which Gold’s Gym appealed.
- Gold’s Gym prevailed on appeal regarding the forgery issue; the court reversed the forgery-related portion and remanded other guaranty claims for further proceedings, while affirming the remaining portions of the trial court’s order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the forgery defense supported summary judgment | Gold’s Gym contends forged signatures on the guaranties negate existence of the contracts. | Brewer/Trust argue signatures are forged and no valid guaranties. | Fact issue on forgery; summary judgment reversed on forgery. |
| Whether Gold's Gym validly ratified the contracts | Brewer/Trust ratified the contracts by conduct despite forgery. | No ratification where contracts not valid or parties to them. | Ratification of the contracts fails as a matter of law. |
| Whether the 2005 Guaranty terminated with termination of the 2005 Franchise Agreement | Termination of the 2005 Franchise Agreement should terminate the 2005 Guaranty. | Continued-applicability provision extends the 2005 Guaranty to the 2008 Agreement. | 2005 Guaranty continued to apply to the 2008 Franchise Agreement; not terminated. |
| Whether the trial court properly admitted or considered summary judgment evidence | Objections to Brewer and Foley affidavits should preclude their use. | Objections were not preserved or do not affect the outcome since forgery issue controls. | Not necessary to decide given forgery reversal; objections deemed immaterial. |
Key Cases Cited
- Missouri Pacific R. Co. v. Lely Dev. Corp., 86 S.W.3d 787 (Tex. App.—Austin 2002) (ratification may be decided as a matter of law if uncontested)
- Beal Bank, SSB v. Biggers, 227 S.W.3d 187 (Tex. App.—Houston [1st Dist.] 2007) (guaranty terms cannot be extended beyond precise terms)
- Huginnie v. Loyd, 483 S.W.2d 696 (Tex. Civ. App.—Tyler 1972) (corporate agents' acts are the corporation's acts)
- Holloway v. Skinner, 898 S.W.2d 793 (Tex. 1995) (corporate veil issues require piercing or not)
- Brown v. Brown, 145 S.W.3d 745 (Tex. App.—Dallas 2004) (objections to summary judgment evidence limitations)
- Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex. 2005) (traditional vs. no-evidence summary judgment standards)
- Beal Bank, SSB v. Biggers, 227 S.W.3d 187 (Tex. App.—Houston [1st Dist.] 2007) (same as above)