OPINION
This case involves the alleged tortious conduct and breach of contract by appellee Dallas County Credit Union and its president, appellee Jennifer Naughton, against appellant Chuck Denson, the owner of appellant ABCD Auto, Inc. The Credit Union filed both a traditional and no-evidence motion for summary judgment on all claims. Naughton filed a no-evidence summary judgment motion. The trial court granted both summary judgments against appellants, but did not specify the grounds for granting them. On appeal, appellants contend (1) their claims are not barred by the doctrine of illegality; (2) Denson has standing to bring the claim; (3) the trial court erred in granting summary judgment against Naughton; (4) the trial court erred in granting summary judgment in favor of the Credit Union; and (5) the nondelegable-duty doctrine does not apply to this case. We affirm in part and reverse and remand in part.
Background
Because the facts of the case are well-known to the parties, we only briefly recite the background here. Tex.R.App. P. 47.1. Appellant Chuck Denson owned ABCD Auto, Inc., a car dealership, which was not licensed to sell cars in Dallas County. In 2003, appellants entered into an agreement with the Credit Union through its alleged agent Otis Chapman 1 in which appellants found cars for the Credit Union’s customers, and the Credit Union then financed the loans. The profits from the car sales were split three ways with one-third going to ABCD Auto, Inc., one-third going to Denson personally, and one-third going to Chapman.
*849 Appellants allege that on many of the loans, Chapman told appellants the ears sold for a lower amount when the Credit Union had actually financed the sales for a greater amount. This resulted in appellants receiving their percentage of the profit from the lower amount.
Appellants brought suit against the Credit Union, Naughton as president of the Credit Union, and Chapman. The claims included breach of contract, fraud, assisting in a breach of fiduciary duty, and civil conspiracy. Naughton filed a no-evidence motion for summary judgment, and the Credit Union filed both a traditional and no-evidence motion for summary judgment on appellants’ claims. The trial court granted both parties’ motions and severed Chapman’s claims making the summary judgments final and appealable. This appeal followed.
Standard of Review
When, as here, the trial court does not specify the grounds on which it granted the summary judgment, we must affirm if any of the grounds specified in the motion have merit.
Provident Life & Acc. Ins. Co. v. Knott,
To prevail on a summary judgment motion brought under Texas Rule of Civil Procedure 166a(c), a movant must show there is no genuine issue as to any material fact, and it is entitled to judgment as a matter of law. Tex.R. Civ. P. 166a(c);
Little v. Tex. Dep’t of Criminal Justice,
Naughton No-Evidence Summary Judgment
Appellants assert Naughton, serving as the Credit Union’s president, perpetuated a fraud, assisted Chapman in breaching his fiduciary duty, and acted in a conspiracy by misrepresenting sales amounts of vehi- *850 cíes. 2 The trial court granted a no-evidence summary judgment in her favor without specifying the grounds on which it found no evidence. Thus, we may affirm if any of the grounds specified in the motion have merit.
1. Fraud
To prove fraud, a party must show (1) the defendant made a material misrepresentation, (2) which was false, (3) which the defendant knew was false or made recklessly without knowledge of the truth at the time it was made, (4) and the defendant made the representation with the intention that the party rely on it, (5) and the party acted in reliance on the statement, and (6) it resulted in injury.
Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc.,
In response to Naughton’s second amended no-evidence motion for summary judgment, appellants filed objections, special exceptions, and a fourth submission of evidence in opposition of summary judgment. Specifically, they claim they were damaged by such fraud and cite to paragraphs two through five and ten and eleven of Chuck Denson’s third affidavit for support. After reviewing these portions of the affidavit, we conclude appellants failed to produce more than a scintilla of evidence that any fraud resulted in injuries or damages. The cited paragraphs in Den-son’s affidavit discuss alleged misrepresentations by Chapman, not Naughton. The affidavit also discusses injuries such as loss of personal credit due to the default of floor-planned vehicles for a grand opening sale, which occurred without Denson’s vehicles. He stated “I liquidated the vehicles at a loss after receiving this news.” While this may be evidence of injury and damages caused by a breach of contract for the grand opening sales, appellants withdrew any such claim against Naughton when they filed their second amended petition.
See
Tex.R. Civ. P. 65 (noting amended pleading supersedes and supplants earlier pleading);
Seung Ok Lee v. Ki Pong No,
Appellants also provided a chart in their response describing the “alleged area of no evidence” and their “responsive genuine issue of fact.” The chart contains a section for fraud, which states “Naughton is liable directly for her fraudulent promises made with no intent to perform that she would insure each loan document was correct before she signed the check, as a co-conspirator for the Fraud of Chapman in each false representation of loan amount. See Genuine Issue number 3, above.” This statement is not evidence of any injury or damage caused by her alleged fraud, and appellants citation to Genuine Issue number 3 references back to a portion of their response that has nothing to do with damages or injuries from Naughton’s alleged fraud. Rather, this section claims damages caused by an alleged breach of the grand opening sales agreement, which as noted above, do not apply to Naughton. Thus, appellants failed to provide more than a scintilla of evidence to raise a genuine issue of material fact regarding damages or injuries resulting from Naughton’s alleged fraud. Accordingly, the trial court properly granted her no-evidence motion for summary judgment on this cause of action.
*851 2. Conspiracy
To prevail on their conspiracy claim, appellants needed to bring forth evidence of the following elements: (1) two or more persons, (2) an object to be accomplished, (8) a meeting of the minds on the object or course of action, (4) one or more unlawful, overt acts, and (5) damages as a proximate result.
Preston Gate, L.P.,
3. Breach of Fiduciary Duty
Appellants asserted a breach of fiduciary duty claim against Chapman individually and Naughton and the Credit Union as joint tortfeasors. Specifically, they claimed Naughton, as a third party, knowingly participated in Chapman’s breach of his fiduciary duty; therefore, she became a joint tortfeasor equally liable with him.
See, e.g., Kinzbach Tool Co. v. Corbett-Wallace Corp.,
Naughton mis-characterizes appellants cause of action as alleging a breach of a fiduciary duty on her part. Appellants, however, have not alleged that she was their fiduciary, but rather that Chapman was their fiduciary and that she knowingly assisted him in breaching his duty. In a no-evidence motion for summary judgment, the movant must state the elements as to which there is no evidence for a claim. Tex.R. Civ. P. 166a(i);
Roventini v. Ocular Sciences, Inc.,
Accordingly, we sustain appellants’ issue. The trial court’s judgment granting the no-evidence motion for summary judgment on appellants’ breach of fiduciary duty claim for Naughton as a joint tortfea-sor is reversed. We remand this cause of action for further proceedings.
Credit Union’s Traditional Motion for Summary Judgment
The Credit Union filed a traditional motion for summary judgment contending appellants’ claims were barred by the doctrine of illegality because they did not have a car dealer permit in Dallas County at the time of the events in question. It also filed a no-evidence motion for summary judgment challenging each of appellants’ causes of action.
Appellants respond the doctrine of illegality does not apply to these facts because the affirmative defense only applies when a contract cannot be performed legally. Further, even if the affirmative defense applies, it would bar only their contract claim against the Credit Union and not their tort claims. They further allege they provided more than a scintilla of evidence to overcome the no-evidence motion for summary judgment. As explained below, we agree with the Credit Union that the doctrine of illegality bars all of appellants’ claims.
Illegality is an affirmative defense the Credit Union must conclusively establish to prove it is entitled to judgment as a matter of law. Tex.R. Civ. P. 94;
Signal Peak Enter, of Tex., Inc. v. Bettina Invs., Inc.,
A contract to do a thing which cannot be performed without violation of the law violates public policy and is void.
Villanueva,
It is undisputed that appellants did not have a permit to sell cars in Dallas County. Texas Transportation Code section 503.021 states “a person may not engage in business as a dealer, directly or indirectly, ..., without a dealer general distinguishing number ... for each location from which the person conducts business as a dealer.” Tex. TRAnsp. Code Ann. § 503.021 (Vernon Supp.2008); see also Tex. Ocg.Code Ann. § 2301.251(a), (b) (Vernon 2004) (noting unless a person holds a license issued under this chapter, he may not engage in business as a motor vehicle dealer, and the franchised dealer must have both a motor vehicle dealer’s general distinguishing number issued under chapter 503 of the transportation code and a license under the occupation code).
An applicant for an original dealer distinguishing number must submit a written application demonstrating he meets the requirements of section 503.032. Tex. TRAnsp. Code Ann. § 503.029 (Vernon Supp.2008). Section 503.032 requires an applicant to demonstrate “that the location for which the applicant requests the num *853 ber is an established and permanent place of business.” Tex. TRAnsp. Code Ann. § 508.032(a) (Vernon Supp.2008). To constitute an established and permanent place of business, the real property must be either owned by the applicant or be leased to the applicant for a term of at least one year by way of a written agreement. Id. § 503.032(a)(1).
Appellants admit they did not have a permit to sell cars in Dallas County, but rather had permits for both Tarrant County and Wood County. They concede they had no legal ability to transact business as an automobile dealer from any location in Dallas County, yet they knowingly and willingly engaged Chapman as their sales agent for the express purpose of selling vehicles at the Credit Union in Dallas County.
Despite conceding the illegality of their conduct, appellants assert two reasons why they should not be barred from recovery: (1) the sales could have been performed legally, and (2) the defense does not pertain to tort claims. We conclude neither argument has merit.
Appellants rely on
Wade v. Jones,
Similar to Wade, appellants assert there is no evidence they could not have obtained a car dealer permit, thus, the contract was capable of being performed legally. We do not find Wade controlling under these facts. The issue of illegality was considered within the context of the plaintiff failing to obtain a proper permit. The issue was not whether the plaintiff was properly licensed, bonded, and insured as required by statute. As the Credit Union correctly states, there is a distinction between being legally disqualified to engage in a certain business and the failure to obtain a permit to engage in a single transaction. Further, the evidence shows appellants could not have obtained a license because they had not established a permanent place of business in Dallas County as required under Texas Transportation Code section 503.032(a)(1).
We also conclude appellants’ reliance on
Comeaux v. Mann,
The Credit Union contends the illegality defense applies to these facts and relies on M.M.M.,
Inc. v. Mitchell,
The Amarillo Court of Appeals reached a similar conclusion in
Rodriquez v. Love,
The common thread of the Credit Union’s cases, which we find controlling, is that in situations where public policy concerns have led to a governmentally supervised statutory licensing scheme, courts have consistently held the unlawful and unlicensed participation in such regulated businesses cannot form the basis for recovery.
See, e.g., Ahumada v. Dow Chem. Co.,
Appellants argue allowing the Credit Union to prevail on the illegality defense allows it to walk away with a windfall. Although this may be true under these facts, to hold otherwise would allow individuals to indirectly profit from a business they are directly prohibited from engaging in unless properly licensed by statute. This we will not do. The transportation code clearly prohibits a dealer from selling cars unless properly licensed. To conclude that appellant could have performed the contract legally if properly licensed nullifies the statutes. We recognize there is nothing inherently illegal about selling cars in Dallas County; however, under these facts, the transaction of selling the cars was illegal because on the day of the transactions, appellants did not have the statutory required license. Thus, we conclude appellants’ breach of contract claim is barred by the illegality defense. Accordingly, the trial court properly granted summary judgment on this claim.
We must now determine whether the illegality defense defeats their remaining tort claims. Appellants assert “while Texas courts have recognized that illegality can be a defense to contract claims, they have not recognized it as a defense to tort claims.” They fail to cite to any authority supporting their position and contend the authority relied on by the Credit Union concerns only illegality barring contract claims. We disagree.
The Credit Union relies on case law recognizing the long-standing unlawful acts rule in Texas, which states that no action may be predicated upon an admittedly unlawful act of the party asserting it.
See Macias v. Moreno,
Because we have concluded the trial court properly granted the Credit Union’s summary judgment as a matter of law, we need not address the no evidence grounds raised in the motion or appellants’ remaining arguments.
Villanueva,
Conclusion
The trial court’s judgment in favor of the Credit Union is affirmed. The trial court’s no-evidence summary judgment in favor of Naughton is reversed and remanded as to appellants’ claim for breach of fiduciary duty as a joint tortfeasor, but is in all other respects affirmed.
Notes
. The pleadings and judgments refer to Otis as both "Chapman" and "Chatman.” For purposes of this appeal, we will refer to him as Chapman.
. Although appellants asserted other causes of actions against Naughton in their original petition, we only address those specifically challenged on appeal.
. Appellants further cite
Corporate Leasing International, Inc. v. Groves,