S & I Management, Inc. v. Sungju Choi
331 S.W.3d 849
Tex. App.2011Background
- In 2005, Steven Lee sought to purchase a business and met Choi, who represented The Michael Group as a broker.
- Choi directed Lee to a gas station/store owned by New Chudhri Enterprises and misrepresented that the nearby defunct gas station would remain vacant and that no one would move into that space.
- After Lee purchased the businesses, QuikTrip opened on the vacant lot, allegedly foreclosing the anticipated use and reducing revenue and value of Lee's purchase.
- Lee swore that brokers knew of QuikTrip’s arrival and that he would not have bought the business if told the truth about QuikTrip’s plans.
- S & I Management sued Choi and The Michael Group for fraud, DTPA violations, negligent misrepresentation, breach of fiduciary duty, and conspiracy; Michael Group moved for summary judgment on vicarious liability; Choi moved for no-evidence summary judgment.
- The trial court granted summary judgment in favor of The Michael Group on its independent-contractor defense and granted Choi’s no-evidence motion, leading to an appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether The Michael Group is vicariously liable under respondeat superior. | Lee: independent-contractor terms negate control; Michael Group liable. | Michael Group: terms show independent contractor; no control over means/methods. | Affirmed traditional SJ for Michael Group; no vicarious liability. |
| Whether Lee has sufficient causation evidence against Choi for damages. | Lee's affidavit shows Choi's representations caused the purchase and loss of revenue/value. | Choi: no evidence of causation; no nexus between reliance and damages. | Reversed as to Choi on causation; Lee's testimony supports causation. |
| Whether the conspiracy claim against Choi (and Iqbal) survives no-evidence challenges. | Evidence of agreement to commit torts shows conspiracy plausibly. | If no tort causation evidence, conspiracy fails. | Sustained as to conspiracy against Choi; remanded for further proceedings on conspiracy claim. |
Key Cases Cited
- Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546 (Tex. 1985) (traditional summary judgment standard)
- Private Mini Storage Realty, L.P. v. Larry F. Smith, Inc., 304 S.W.3d 854 (Tex. App.-Dallas 2010) (no-petitioner status; burden on movant)
- Citizens First Nat'l Bank of Tyler v. Cinco Explor. Co., 540 S.W.2d 292 (Tex. 1976) (burden-shifting in summary judgment)
- Swilley v. Hughes, 488 S.W.2d 64 (Tex. 1972) (summary judgment standard; conclusively established defenses)
- Bell v. VPSI, Inc., 205 S.W.3d 706 (Tex. App.-Fort Worth 2006) (independent-contractor status; control analysis)
- Triton Oil & Gas Corp. v. Marine Contractors & Supply, Inc., 644 S.W.2d 443 (Tex. 1982) (contract terms; sham/true relationship; control)
- Denson v. Dallas County Credit Union, 262 S.W.3d 846 (Tex. App.-Dallas 2008) (no-petitioner; standard of review for evidence)
- Flood v. Katz, 294 S.W.3d 756 (Tex. App.-Dallas 2009) (no-evidence summary judgment standard)
- W. Invs., Inc. v. Urena, 162 S.W.3d 547 (Tex. 2005) (causation; substantial factor; producing/cause in fact)
- Ford Motor Co. v. Ledesma, 242 S.W.3d 32 (Tex. 2007) (prognostic causation standards)