Sanchez v. MulvaneySanchez v. Mulvaney
OPINION
Opinion by
This is an appeal from the trial court’s summary judgment rendered in favor of appellees. We affirm in part and reverse in part and remand.
Appellants, Henry Sanchez, Jr. and Josefina Sanchez, are the co-owners of real property on which they intended to construct a Sonic Drive-in restaurant. The Sanchezes hired appellee Hypersonic Construction, LLC (“Hypersonic”) as the general contractor. Appellee, Ryan Mulva-ney, was one of the member-owners of Hypersonic. Ryan Mulvaney d/b/a Freestone Equipment Co. (“Mulvaney”) was also one of the subcоntractors on the project. Alamo Concrete Products, Ltd. (“Alamo”) supplied the concrete. At some point during construction, Alamo was not paid for all the concrete it suppliеd to the project, and it filed a mechanic’s and mate-rialman’s lien encumbering the Sanchezes’ property. To avoid foreclosure and obtain permanent financing for the project, the Sanchezes paid Alamo the amount owed, plus attorney’s fees and interest.
The Sanchezes then sued Hypersonic; Ryan Mulvaney individually, in his capacity as an owner of Hypersoniс, and in his capacity as owner/operator of Freestone Equipment Co.; and four other individuals who were either owners or managers of Hypersonic on the following causes of aсtion: violation of the Construction Trust Fund Act, DTPA violations, breach of contract, conversion, and common law contribution and equitable subrogation. In their petition, the Sanchezes asserted thеy paid to Hypersonic sufficient funds earmarked for payment to Alamo, but that neither Hypersonic nor Mulvaney ensured that the money was tendered to Alamo. The San-chezes sought reimbursement for the monies paid by them to Alamo.
During mediation, the Sanchezes settled their claims against the four other individuals. Also, by this time, Hypersonic was defunct and insolvent. Eventually, the trial court rendered summary judgment in fаvor of Mulvaney on all of the Sanchezes’ claims, and this appeal ensued.
MULVANEY’S MOTION FOR SUMMARY JUDGMENT
As a preliminary matter, we first address the parties’ disagreement over the type of summary judgment sought by Mul-vaney and the grоunds on which he sought summary judgment. Mulvaney’s motion states he sought both a traditional and no-evidence summary judgment. However, we determine the standard of proof on a summary judgment motion after considering the substance of the motion, rather than categorizing the motion strictly by its form or title.
See Rodgers v. Weather-spoon,
A motion for summary judgment must state the specific grounds upon which judgment is sought.
See
The Sanchezes assert that, to the extent Mulvaney’s motion seeks a no-evidence summary judgment, it was insuffi
In his motion for summary judgment, Mulvaney argued all of the liability the Sanchezes sought to impose on him was related to or arose from the сontract between Hypersonic and the Sanchezes; therefore, personal liability could be imposed on him only if the Sanchezes could pierce Hypersonic’s corporate veil. Mul-vaney argued the corporate veil could not be pierced because there was no evidence he committed any actual fraud or that he used Hypersonic as а sham to perpetrate a fraud. Mulvaney also argued that the Sanchezes could not impose individual liability on him based upon Hypersonic’s forfeiture of its charter because all cаuses of action arose before Hypersonic forfeited its charter in December 2006. Mulvaney did not seek to establish his entitlement to a traditional summary judgment by arguing that there existed no genuine issue of material fact as to one or more essential elements of each of the Sanchezes’ causes of action. Instead, he sought a no-evidence summary judgment only on the grounds that he was shielded from personal liability because there was no evidence of actual fraud on his part. Therefore, we construe Mulvaney’s motion as seeking a no-evidence summary judgmеnt, and we apply the appropriate standard of review.
A no-evidence summary judgment motion is improperly granted when the non-movant brings forth more than a scintilla of probative evidenсe that raises a genuine issue of material fact.
BREACH OF CONTRACT CLAIM
There is no dispute that the only contract in this case is the one entered into between the Sanchezes and Hypersonic. In their petition, the Sanchezes alleged Hypersonic “and its individuаl owners” breached the construction contract because “[Hypersonic] ... failed to perform numerous obligations under said contract.” The Sanchezes sought recovery against Mulvaney and the other individual defendants “as a result of [Hypersonic’s] forfeited status as a Texas Limited Liability Company.” Thus, the Sanchezes sought to hold Mulvaney individually liable for
Hy
Generally, members are not individually liable for the debts of a limited liability company.
McCarthy v. Wani Venture, A.S.,
NON-CONTRACT CLAIMS
We believe Mulvaney’s argument that liability could be imposed on him only if the Sanchezes pierced Hypersonic’s corporate veil misconstrues the non-contract claims brought against him. In their petition, the Sanchezes alleged Mulvaney “intentionally or knowingly or with intent to defraud, directly or indirеctly retained, used, disbursed, or otherwise diverted [construction payments] without first fully paying obligations then owed ... to [Alamo].” The Sanchezes also alleged Mulva-ney violated the DTPA by making certain misrepresentations, breaching certain warranties, and engaging in an unconscionable action or course of action. It is therefore clear that the Sanchezes sought to hold Mulvaney individuаlly liable for his own allegedly tortious or fraudulent actions.
The issue of a defendant’s liability in his individual capacity is distinct from that of his liability under an alter ego theory. A corporation’s agent is personally liable for his own fraudulent or tortious aсts, even when acting within the course and scope of his employment.
See Miller v. Keyser,
CONCLUSION
We affirm the trial court’s summary judgment in favor of Mulvaney on the