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406 S.W.3d 609
Tex. App.
2013
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Background

  • J.B. Grand Canyon Dairy, L.P. conveyed a dairy to Jeff Whalen in 2007; Whalen operated it as JW Grand Canyon Dairy, LLC before completion.
  • Whalen and J.B. executed a lease allowing operation of the dairy prior to purchase completion.
  • Protocol Technologies, Inc. supplied cattle feed to Whalen; Whalen opened a Protocol credit account in May 2007 and paid through February 2008, then fell into arrears.
  • Whalen issued a check for $8,211.22 in April 2008 to bring the account current, but payment was stopped; debt rose to $20,272.93 by Whalen’s bankruptcy.
  • Protocol sued J.B. for the unpaid feed, alleging J.B. was liable due to Whalen’s control and use of the dairy name, and possible de facto partnership or agency.
  • Trial court granted summary judgment for J.B. on Protocol’s equitable claims, while denying Protocol’s initial MSJ; on reconsideration, the court affirmed for J.B. on all issues.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether denial of Protocol's initial MSJ was proper Protocol argues the court erred in not granting MSJ after the first hearing. J.B. contends the grounds were not properly raised in writing and the order was correct. Issue overruled; interlocutory denial cannot be reviewed on appeal.
Whether express contract bars quantum meruit and unjust enrichment Protocol asserts no valid express contract existed to bar equitable claims. J.B. asserts open-account/credit relationship constitutes an express contract precluding relief. Issue sustained; express contract exists through open-account arrangement, barring equitable claims.
Whether Protocol proved agency/partnership/de facto partnership with Whalen Protocol asserts de facto partnership/joint venture and agency by control and shared operations. J.B. presented written disclaims of agency/partnership and evidence Whalen controlled operations. Issue overruled; no agency or partnership; contracts disclaimed such relationship; no genuine fact issue raised.

Key Cases Cited

  • San Antonio Masonry & Tool Supply, Inc. v. Epstein & Sons International, Inc., 281 S.W.3d 441 (Tex. App.—San Antonio 2005) (open accounts can create an express contract barring quantum meruit)
  • Ingram v. Deere, 288 S.W.3d 886 (Tex. 2009) (joint venture factors; no single factor controls formation)
  • A & S Electrical Contractors, Inc. v. Fischer, 622 S.W.2d 601 (Tex. App.—Tyler 1981) (absence of genuine agency/partnership evidence; landlord-tenant relation insufficient for agency)
  • Gaines v. Kelly, 235 S.W.3d 179 (Tex. 2007) (apparent authority must be based on principal's acts; communications to third party insufficient)
  • Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39 (Tex. 1992) (elements of quantum meruit and unjust enrichment; implied contract theories)
Read the full case

Case Details

Case Name: Protocol Technologies, Inc. v. J.B. Grand Canyon Dairy, L.P.
Court Name: Court of Appeals of Texas
Date Published: Mar 28, 2013
Citations: 406 S.W.3d 609; 2013 WL 1248289; 2013 Tex. App. LEXIS 3992; 11-11-00079-CV
Docket Number: 11-11-00079-CV
Court Abbreviation: Tex. App.
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