Lujan v. Navistar, Inc.
555 S.W.3d 79
Tex.2018Background
- Albert Lujan bought Texas Wholesale Flower Co. in 2005, then purchased five Navistar CF600 trucks; he later formed Texas Wholesale Flower Co., Inc. and executed an IRS §351 transfer purportedly conveying assets to the corporation.
- Corporate tax returns (2006–2007) and transfer documents listed the five trucks as corporate assets; the corporation’s certificate was forfeited in 2008 for unpaid franchise taxes.
- Lujan sued Navistar individually in 2009 for breach of warranty; ownership of the trucks (Lujan personally v. the corporation) became central to standing and damages for post-transfer injuries.
- After four years the corporation intervened and then had its intervention struck as untimely; Navistar moved for partial summary judgment that Lujan lacked standing for post-transfer injuries.
- Lujan filed a sworn affidavit denying transfer and corporate activity, conflicting with his deposition, corporate tax returns, the §351 transfer, and admissions by his counsel; the trial court struck the affidavit as a sham and granted partial summary judgment.
- The Texas courts of appeals were divided about recognition of the sham-affidavit doctrine; the Texas Supreme Court granted review to decide (1) whether the sham-affidavit rule is a valid application of Tex. R. Civ. P. 166a and (2) whether the trial court abused its discretion here.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Texas courts may apply the "sham affidavit" rule under Tex. R. Civ. P. 166a | Lujan: rule is a federal doctrine not available in Texas; Texas rules preclude striking affidavits except under Rule 166a(h) remedies | Navistar: sham-affidavit doctrine enforces Rule 166a(c)'s requirement that only "genuine" fact issues survive summary judgment | Court: sham-affidavit rule is a valid tool under Rule 166a(c) to disregard contradictory sworn statements absent sufficient explanation |
| Whether Rule 166a(h) forbids treating a contradictory affidavit as a sham (i.e., limits remedies) | Lujan: Rule 166a(h) lists exclusive remedies for bad-faith affidavits and thus prevents other consequences like disregarding affidavits | Navistar: disregarding a non-genuine affidavit enforces Rule 166a(c) and is distinct from sanctioning bad-faith conduct under 166a(h) | Court: no conflict; 166a(c) governs genuineness for summary judgment and 166a(h) provides sanctions—disregarding a sham affidavit is not a prohibited consequence |
| Whether the trial court abused its discretion in striking Lujan’s affidavit as a sham | Lujan: his affidavit aligns with deposition on truck ownership and should not be disregarded; prior cases limit striking affidavits | Navistar: affidavit materially conflicts with Lujan’s deposition, corporate documents, and counsel’s admissions; counsel admitted parts were false | Court: no abuse of discretion—multiple sworn contradictions, admitted falsity, and counsel statements supported striking the affidavit |
| Effect on remaining claims and appellate disposition | Lujan: partial summary judgment may not have disposed all claims (pre-transfer damages may remain) | Navistar: argued partial summary judgment barred post-transfer claims; separate full-summary-judgment ruling was also entered below | Court: affirmed partial summary judgment; reversed in part and remanded to court of appeals to determine what claims, if any, remain unresolved |
Key Cases Cited
- Perma Research & Dev. Co. v. Singer Co., 410 F.2d 572 (2d Cir. 1969) (origin of the sham-affidavit doctrine)
- Radobenko v. Automated Equip. Corp., 520 F.2d 540 (9th Cir. 1975) (sham issues not "genuine" and should not force trial)
- Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795 (U.S. 1999) (a party cannot defeat summary judgment by unexplained contradictions in sworn statements)
- Kennett-Murray Corp. v. Bone, 622 F.2d 887 (5th Cir. 1980) (contradictory affidavits may be legitimate when they explain confusion; genuineness inquiry is central)
- Albertson v. T.J. Stevenson & Co., 749 F.2d 223 (5th Cir. 1984) (doctrine that nonmovant cannot defeat summary judgment by unexplained contradictory affidavit)
- Gulbenkian v. Penn, 252 S.W.2d 929 (Tex. 1952) (trial court must not weigh credibility on summary judgment; rules aim to eliminate patently unmeritorious claims)
- Gaines v. Hamman, 358 S.W.2d 557 (Tex. 1962) (a deposition does not necessarily control over an affidavit; conflicting inferences can create fact issues)
- Randall v. Dallas Power & Light Co., 752 S.W.2d 4 (Tex. 1988) (deposition does not automatically control an affidavit; context matters)
- Pando v. Southwest Convenience Stores, LLC, 242 S.W.3d 76 (Tex. App.-Eastland 2007) (illustrative Texas application of the sham-affidavit rule: post-deposition affidavit contradicted prior testimony with no explanation)