Rоbert ORTIZ, Appellant, v. Andrew COLLINS, Tim Welsh, and Jerel S. Twyman, Appellees.
No. 14-04-01156-CV
Court of Appeals of Texas, Houston (14th Dist.).
July 6, 2006.
Rehearing Overruled Aug. 10, 2006. Rehearing En Banc Overruled Oct. 19, 2006.
LESLIE BROCK YATES, Justice.
SUBSTITUTED MAJORITY OPINION
LESLIE BROCK YATES, Justice.
We withdraw the majority and concurring opinions issued March 9, 2006 and substitute the following opinions in their place.
The trial court granted summary judgment against appellant Robert Ortiz on all of his claims against appellees Andrew Collins, Tim Welsh, and Jerel S. Twyman. In four issues, Ortiz claims the trial court erred in dismissing his claims. In one cross issue, Collins and Welsh challenge this court‘s appellate jurisdiction.1 We affirm in part and reverse and remand in part.
I. BACKGROUND
Collins and Welsh purchased a townhouse at a trustee‘s foreclosure sale on September 3, 2002. Ortiz, the previous owner, challenged the foreclosure but was unable to prevent it. Collins and Welsh then attempted to gain possession through a forcible detainer. However, Collins and Welsh were still unable to secure possession and hired an attorney, Twyman, who filed another forcible detainer action in November 2002, nearly two months after the original foreclosure sale.
While this second forcible detainer action was pending, the parties entered into negotiations to settle the forcible detainer action and for Ortiz to purchase the property from Collins and Welsh. These negotiations are the subject of the present litigation. Ortiz claims that Collins agreed, on his own and on Welsh‘s behalf, to sell Ortiz the property for $60,000, which is $10,000 more than they paid at the foreclosure sale, and to have a contract prepared me
Appellees do not dispute that negotiations occurred but deny there was ever an oral agreement to sell Ortiz the property. Collins and Welsh received Ortiz‘s proposed contract but refused to sign it, finding its terms unacceptable. They waited fifteen days after the forcible detainer trial and, without an agreement in place to sell Ortiz the property, had Twyman execute a writ of possession.
The day after Ortiz received the notice to vacate, he filed suit against Twyman, Collins, and Welsh. In various amended and supplemental petitions, Ortiz asserted claims for fraud, negligent misrepresentation, promissory estoppel, breach of contract, violation of the Deceptive Trade Practices—Consumer Protection Act (“DTPA“), and conspiracy to defraud and violate the DTPA.
Appellees moved for summary judgmеnt in May 2003. At that time, Ortiz had three live pleadings (Plaintiff‘s Original Petition, Plaintiff‘s First Supplemental Petition, and Plaintiff‘s Second Supplemental Petition). The trial court, in two orders signed on July 22, 2003, granted summary judgment on the claims moved upon. However, between the time appellees filed their summary judgment motions and the trial court ruled on them, Ortiz filed two more supplemental petitions (Plaintiff‘s Third Supplemental Petition and Plaintiff‘s Fourth Supplemental Petition) asserting additional claims. The trial court issued an order in September 2003 clarifying that its prior summary judgment orders were interlocutory, and appellees again moved for final summary judgment in October 2003. The trial court ruled on these motions on August 12, 2004, dismissing all claims asserted against appellees. Again, Ortiz had filed another petition (Plaintiff‘s First Amended Original Petition) after the summary judgment motions were filed but before the trial court ruled. This latest petition included some purportedly new claims against appellees and added a fourth defendant. This fourth defendant was never served, and on October 21, 2004, the trial court granted Ortiz‘s motion to nonsuit the fourth defendant. The October 21 order also stated, “All claims of all parties in this cause have been disposed and are appealаble.”
II. STANDARDS OF REVIEW
Appellees’ motions for summary judgment contained both traditional and no-evidence grounds. See
III. ANALYSIS
A. Subject Matter Jurisdiction
In Collins and Welsh‘s cross issue and in appellees’ motions to dismiss, appellees argue this court has no subject matter jurisdiction because Ortiz did not file a timely notice of appeal. Ortiz filed his notice of appeal on November 19, 2004. Appellees argue this was untimely because it was more than thirty days after August 12, 2004, the date the trial court signed the second set of orders granting summary judgment on all claims against them. See
Each of Twyman‘s various answers includes a “Request for Sanctions” under the DTPA,
Because we have concluded Twyman‘s request for sanctions under
B. Fraud, Negligent Misrepresentation, Promissory Estoppel, and Conspiracy to Defrаud
Ortiz sued appellees for fraud, negligent misrepresentation,4 and promissory estoppel based on their alleged misrepresentations during the negotiation process when Ortiz was seeking to repurchase the property and forestall execution of a writ of possession. All three claims share the common element of reliance. See Beal Bank, S.S.B. v. Schleider, 124 S.W.3d 640, 647, 651, 654 (Tex.App.—Houston [14th Dist.] 2003, pet. denied). This reliance must be reasonable and justified. See Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 436 (Tex. 1997); Beal Bank, 124 S.W.3d at 653-54; Gilmartin v. KVTV-Channel 13, 985 S.W.2d 553, 558 (Tex.App.—San Antonio 1998, no pet.).
Ortiz, who was represented by his brother during these negotiations, does not dispute that the parties’ relationship was adversarial initially but contends there is a fact issue as to whether it remained adversarial because the parties had settled their dispute. Even assuming the parties entered into an oral agreement to sell Ortiz the property, the mere existence of that agreement did not align all parties’ interests and remove the adversarial nature of the relationship, particularly considering that the written details had yet to be worked out. See McCamish, 991 S.W.2d at 794 (holding that, in determining whether a relationship is adversarial, courts should look to the relationship of the parties and the extent to which their interests arе aligned). We hold that, as a matter of law, the parties’ relationship remained adversarial, and thus any reliance by Ortiz on statements made by appellees during the negotiation process was unjustified and unreasonable.6 Thus, the trial court did not err in granting summary judgment on Ortiz‘s fraud, negligent misrepresentation, and promissory estoppel claims.
In addition to his fraud claim, Ortiz alleges that appellees conspired to defraud him. Conspiracy is not an independent cause of action but requires an underlying tort. Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996); Hunt v. Baldwin, 68 S.W.3d 117, 133 (Tex.App.—Houston [14th Dist.] 2001, no pet.). Because summary
Ortiz claims that summary judgment on his promissory estoppel claim against Collins and Welsh was error because they did not move for summary judgment on that claim. He argues that because he asserted a promissory estoppel claim in his First Amended Original Petition, which was filed after Collins and Welsh‘s second summary judgment motion, their motion could not have covered this claim. Thus, Ortiz contends, the trial court erred in granting more relief than was requested. See Wilson v. Korthauer, 21 S.W.3d 573, 579 (Tex.App.—Houston [14th Dist.] 2000, pet. deniеd). However, summary judgment may be granted on later-pleaded causes of action if the grounds actually asserted show that the plaintiff could not recover on the later-pleaded cause of action. Id.; accord Espeche v. Ritzell, 123 S.W.3d 657, 664 (Tex.App.—Houston [14th Dist.] 2003, pet. denied) (“If a motion for summary judgment is sufficiently broad to encompass later-filed claims, the movant need not amend his motion.“). Appellees moved for summary judgment on the ground that any reliance was not justified, and since justifiable reliance is also an element of promissory estoppel, the summary judgment motions were broad enough to cover Ortiz‘s later-pleaded promissory estoppel claim.
Ortiz also argues that appellees did not move for summary judgment on all of his fraud claims. Ortiz asserts that his initial fraud claim was for fraudulent misrepresentation and that he included a new claim for fraudulent conduct in his First Amended Original Petition that was not included in appellees’ summary judgment motions. Ortiz fails to explain how these fraud claims differ, given that both are based on allegations that he detrimentally relied on appellees’ alleged misrepresentations. To the extent that these fraud claims are somehow separate, both require reasonable reliance.7 See Am. Tobacco Co., 951 S.W.2d at 436; Beal Bank, 124 S.W.3d at 653-54. Thus, appellees’ summary judgment motions were sufficiently broad to cover any claim for fraudulent conduct. See Espeche, 123 S.W.3d at 664; Wilson, 21 S.W.3d at 579.
The trial court did not err in granting summary judgment on Ortiz‘s claims for fraud, negligent misrepresentation, promissory estoppel, and conspiracy to defraud. We overrule all four of Ortiz‘s issues to the extent he alleges summary judgment was improper as to these claims.
C. Breach of Contract
Ortiz sued Collins and Welsh8 for breach of contact, alleging that they breached their oral agreement to resell him the property. Collins and Welsh moved for summary judgment based on the statute of frauds because a contract for the sale of real estate must be in writing. See
Promissory estoppel defeats a statute of frauds defense if a plaintiff proves all elements of a cause of action for promissory estoppel in addition to showing that the defendant promised to sign a written document complying with the statute of frauds. See Ford v. City State Bank of Palacios, 44 S.W.3d 121, 139 (Tex.App.—Corpus Christi 2001, no pet.); see also Moore Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 937 (Tex. 1972). Ortiz claims that Collins‘s promise to prepare a contract is sufficient to raise a fact issue on his promissory estoppel defense and thus prevent summary judgment. However, as previously discussed, Ortiz‘s promissory estoppel claim fails as a matter of law because, given their adversarial relationship, his reliance on any statements from appellees was unjustified. That includes the alleged promise to prepare a contract, which we note Ortiz admittedly did not rely on because he eventually drafted a contract himself. Just as a lack of justifiable reliance defeats Ortiz‘s promissory estoppel cause of action, it prevents his use of promissory estoppel as a defense to Collins and Welsh‘s statute of frauds defense. See Collins v. Allied Pharmacy Mgmt., Inc., 871 S.W.2d 929, 936-37 (Tex.App.—Houston [14th Dist.] 1994, no pet.) (applying reasonable reliance requirement to promissory estoppel argument against statute of frauds defense).
We overrule Ortiz‘s first issue to the extent that he аlleges the trial court erred in granting summary judgment on his breach of contract claim against Collins and Welsh.
D. DTPA and Conspiracy to Violate the DTPA
Ortiz asserted that appellees conspired to and actually did violate the DTPA by engaging in an unconscionable course of conduct during their negotiations. The DTPA grants consumers a cause of action for false, misleading, or deceptive practices or acts.
To recover under the DTPA, the plaintiff must be a consumer. Vinson & Elkins v. Moran, 946 S.W.2d 381, 406 (Tex.App.—Houston [14th Dist.] 1997, writ dism‘d by agr.). Whether a party is a consumer is a question of law. Burroughs v. APS Int‘l Ltd., 93 S.W.3d 155, 163 (Tex.App.—Houston [14th Dist.] 2002, pet. denied). To be a consumer, the plaintiff must have sought or acquired goods or services by purchase or lease, and those goods or services must form the basis of the complaint. Id. Consumer status depends on the plaintiff‘s relationship to the transaction, not the contractual relationship between the parties. Flenniken v. Longview Bank & Trust Co., 661 S.W.2d 705, 707 (Tex. 1983); Vinson & Elkins, 946 S.W.2d at 407. Therefore, a plaintiff neеd not show contractual privity with the opposing party to assert consumer status under the DTPA. Amstadt, 919 S.W.2d at 649; Burroughs, 93 S.W.3d at 163. In
In Twyman‘s summary judgment motion, he argued, among other things, that Ortiz was not a consumer of his services and that the negotiations did not constitute a consumer transaction under the DTPA. Ortiz does not claim that he was a third-party consumer of Twyman‘s legal services. Rather, Ortiz argues that because he was negotiating to repurchase his house, the transaction was a consumer transaction. However, the transaction at issue was not the purchase of a house. Ortiz lost his house in a foreclosure sale and was trying to settle the forcible detainer action against him to avoid surrendering possession. Negotiations to settle litigation do not constitute consumer transactions, even when the subject of the litigation involves a good such as a house. See Kincaid v. Cummins Engine Co., No. 05-04-01803-CV, 2005 WL 1744959, at *1 (Tex.App.—Dallas July 26, 2005, no pet.) (mem. op.). Otherwise, every lawsuit concerning a dispute over the purchase or lease of a good or service would itself constitute a consumer transaction. As a matter of law, Ortiz is not a consumer and has not shown that any alleged deceptive conduct by Twyman occurred in connection with a consumer transaction. Thus, the trial court did not err in granting summary judgment on this claim. Because summary judgment was proper on the underlying DTPA claim, summary judgment was also proper as to Ortiz‘s claim against Twyman for conspiracy to violate the DTPA. See Tilton, 925 S.W.2d at 681; Hunt, 68 S.W.3d at 133. We overrule Ortiz‘s fourth issue to the extent that he asserts the trial court erred in granting summary judgment on his DTPA and DTPA conspiracy claims against Twyman.
Collins and Welsh did not move for summary judgment on the ground that this was not a consumer transaction. Though they labeled their motion as to Ortiz‘s DTPA claim against them a no-evidence summary judgment motion, the actual grounds for the motion are unclear. On appeal, they argue that there is no evidence they engaged in an unconscionable act or course of conduct because there is no evidence that they ever represented there was a contract. Ortiz argues on appeal that Collins and Welsh‘s summary judgment motion does not comply with
A no-evidence motion for summary judgment “must state the elements as to which there is no evidence.”
Collins and Welsh‘s summary judgment motion contains the following paragraph regarding Ortiz‘s claim that they engaged in an unconscionable act or course of conduct:
Plaintiff further offers no evidence, and none appears in the record, to support a claim under the laundry list of violations identified in the DTPA. Section 17.50(a)(3) of the DTPA provides that a consumer may recover actual damages for “any unсonscionable action or course of action” that is the producing cause of damages.
Tex. Bus. & Com.Code § 17.50(a)(3) . The DTPA defines an “unconscionable action or course of action” as “an act or practice, which . . . takes advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree.”Id. § 17.45(5) . Unconscionability under the DTPA is an objective standard for which scienter is irrelevant. Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 677 (Tex. 1998). To prove an unconscionable action or course of action, a plaintiff must show that the defendant took advаntage of his lack of knowledge and “that the resulting unfairness was glaringly noticeable, flagrant, complete and unmitigated.” Id. (quoting Chastain v. Koonce, 700 S.W.2d 579, 583 (Tex. 1985)).
A violation of the “laundry list” contained in
Collins and Welsh have defended the trial court‘s grant of summary judgment on Ortiz‘s DTPA conspiracy claims against them solely on the basis that there is no viable underlying DTPA claim. See Tilton, 925 S.W.2d at 681; Hunt, 68 S.W.3d
E. Lis Pendens
In their first summary judgment motion, Collins and Welsh note that Ortiz filed a notice of lis pendens against the property and complain that it interfered with their ability to market and sell the property. They did not allege that the noticе of lis pendens was itself invalid or request that it be vacated. However, in its July 22 order granting this motion, the trial court ordered that the notice of lis pendens “is hereby removed as a cloud on the title of the real property.” Ortiz asserts that the trial court erred in granting this relief because it was not requested.
To preserve a complaint for appellate review, a party must first present the issue to the trial court.
IV. CONCLUSION
We reverse summary judgment as to Ortiz‘s DTPA and DTPA conspiracy claims against Collins and Welsh and remand for proceedings consistent with this opinion. We affirm the remainder of the trial court‘s judgment contained in its summary judgment orders of July 22, 2003 and August 12, 2004 and its nonsuit order of October 21, 2004.
MIRABAL, J. concurring.
MARGARET GARNER MIRABAL
Senior Justice, concurring.
SUBSTITUTED CONCURRING OPINION
I respectfully concur in the result only.
I particularly note the different path I would take to the result reached under Section III B of the majority opinion, dealing with the alleged misrepresentations during the negotiation process.
This case involves a common situation. The parties to the litigation entered into settlement negotiations. The parties did not reduce their negotiated agreement, if any, to writing. Thus, the agreement, if any, was not enforceable and could not reasonably have been relied on by either side. See Padilla v. LaFrance, 907 S.W.2d 454, 459-61 (Tex. 1995), and its progeny.1
